(If you die first you basis gets stepped up and there’s no tax savings.)It looks like adding it to capex is a SLIGHT winner. (1/27th of the money spent as a deduction per year.

One thing you can do is request that your deductible is increased.

He's not an accredited investor so he can't deduct losses on personal income. 

But I could also profit off depreciation of the property annually, appreciation (especially if I make improvements), and tax deductions.

I was confused about how to file taxes and separate tax deductibles from personal and business filing, as a H1B holder.

You might only be able to make $30k-$40K a year from a 3 bedrooms SFH Airbnb there, but this amount will not cover the mortgage after you deduct 50% cost for a short term rental.

Here’s what you should do next:Check the Lease: Look at your lease for rules on early termination and notice periods.Document Everything: Take photos or videos of the property to document its condition.Send Final Accounting: Prepare a final accounting of the security deposit, showing any deductions for unpaid rent or damages, and send it to the tenant’s last known address.Re-rent the Property: Start looking for new tenants immediately to minimize your financial loss.Consider Legal Action: If the deposit doesn’t cover what they owe, you can take them to small claims court.Keep Records: Save all communication with the tenant, like texts and emails.Get Legal Advice: Consulting a local attorney who specializes in landlord-tenant law might be helpful.Best of luck getting this resolved.Carlos

I've seen judges for the last 20 years throw out accrued late fees and deduct paid fees if deemed excessive and predatory.  

As a result, the company directly deducted their future property management fee from my rent income for the remaining months left on the contract.  

Mortgage interest is tax deductible, paying down principle is not2.