was there any total loss?

If you spend the entire $300k restoring the property, then here is the end result:- deductible casualty loss of $50k- no current tax- the restored property has $0 basis and cannot be depreciated- when it is later sold, the entire sale price is taxableMechanics and reporting are tricky, and I would not recommend to DIY it, especially since my scenario is over-simplified, and your real scenario is likely to involve more gotchas.Thanks so much. 

Or perhaps you have a DSCR loan on your rental properties and that keeps the fix/flip income (or loss) from affecting the DSCR calculation and tripping the covenant?

The resulting first-year tax benefit was approximately $8,200 due to passive loss suspension rules.

I'd assume you have found it to be financially worthwhile to work with turnkey properties. 

I am not privy to their financial situation.

The numbers I have are from a profit loss statement it included all expenses and vacancies.

Cover for 150% of actual value and you are still out way ahead if you have a total loss.

And for example if they see a property was taken back by the bank and is not shown on the track record as a huge loss, then that is another type of red flag.Internet searches can also be done on the sponsor looking for lawsuits, etc.

A 1033 exchange is specifically for involuntary conversions and catastrophic loss situations like yours.