There are specific agreements that are required and that must contain very specific language in order to qualify for tax-deferred treatment. 

Do we assume that the treatment by the borrower mirrors that of the lendor?

If their income which pays you comes from the folks who are in treatment and the repairs affect the amount of income they can earn then it is safe to assume the payment obligation will fall under stress as well.  

I am usually pretty forward in comparing our treatment of real property to be no where in the ballpark as folks who actually fix and flip full time or alike.

If your CPA didn't explain the logic behind his suggestion, then you may want to find an adviser who you can work with to understand not only the output, but the decisions and information that were taken into account to get to the end.Being classified as an S corporation employee has one potential big advantage: S corporation tax treatment can provide a way to take some money out of your business without paying employment taxes.

They only manage other people's properties so there is no preferential treatment of "theirs over yours".

Hi Matt,1031 ExchangeFirst, in order to qualify for 1031 Exchange treatment you must have the intent to hold the property for rental, investment or use in a business.

So, they could potentially receive tax free treatment for up to $250/$500,000 in gain and the balance (if any) would be deferred into another rental property via the 1031 Exchange.

If it wasn't you may not have recourse to the seller to have extermination/treatment done.

I use the basic blinds from Lowes/Home Depot , tenant is responsible for curtains/window treatment