We are drafting an accounting statement of security deposit listing all the deductions.

If walls are damaged enough to add extra cost to paint job, you can have contractor itemize that part as additional charge and deduct from security.

Tax Strategies- Tax Deductions: Ensure you're taking full advantage of tax deductions related to mortgage interest, property taxes, maintenance, and depreciation.- Consult a Tax Professional: Work with a tax advisor to develop strategies that minimize your tax burden and maximize after-tax returns.10.

Insurance would cover it, I would pay the deductible, and no assets would be lost.If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is expected to be higher, you may consider an umbrella insurance policy.

Some lenders may allow it, while others may require refinancing.Quit claim deed: This is typically how you'd transfer the property to an LLC, but only do this after getting lender approval.Alternative to LLC:Consider an umbrella insurance policy, which can provide additional liability protection without the complexities of an LLC.Tax considerations:Consult with a tax professional about deductions available for rental properties.Be aware of potential capital gains tax implications if you sell the property in the future.Estate planning:Consider setting up a living trust to hold the property.

You cannot deduct the whole cost of the property at once in your profit and loss statement as a lump sum.

Plus, that isn't really an expense that should be deducted from the security deposit anyway.

What else is deductible from rental income?

If you’re even considering this look around for something with a $10-$20k deductible and see if you can cut it in half.

If not, you can't take those deductions against your W2 anyhow.