When you have a big cost segregation depreciation plus your big startup expenses such as furniture and supplies, and you then have a big tax deduction against your big W-2 income because your passive losses are no longer limited with your big material participation, it increases your audit risk a ton.

You can also deduct the cost of creating the LLC.

It offers triple tax benefits: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free.5.

I had a massive flood in my house from frozen and burst water lines and my insurance covered everything except for my deductible.

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.

Right now as a renter you're paying 100% interest and personal rent isn't tax deductible. 

@Natan Gutt Guessing what you're referring to is either:1) Voucher is @ $1550, but once you deduct utilities (never include in rent!)

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.

My husband and I are in the same boat with a VA loan, and being told that since we itemized and deducted so many repairs, etc last year from our new rental that we can not count any of the 3k in rent towards our income, and so the 2850 mortgage payment doesn’t offset and therefore ruins our chances of getting a mortgage :( 

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.