We'd love to escape the cold Dutch winters and enjoy a warmer climate.When we're not using the property, we plan to rent it out as an Airbnb to generate passive income.

What's left after subtracting the expenses is your Net Income. 

If I read the story correctly, your client did not report rental income.

Consult a tax professional to optimize deductions and explore strategies like Real Estate Professional Status or short-term rental loopholes to apply depreciation to non-passive income.This post does not create a CPA-Client relationship.

Real estate investing is not passive, even with a property manager.

Take time to learn through military-focused resources like Military House Hacking or Active Duty Passive Income, and connect with other military investors online or on base.

There will likely be a partnership return required where you flipped a house with a partner and lost $120,000.If you sold the other property within the same partnership, it will also be reported on that partnership return.The net result to you is that you will receive a K-1 showing your income / loss which you then use to report on your individual return.If you made no money within the same year, you likely pay no additional taxes / get no additional refund.Best of luck.

Since the last time I was online, I have grown the investing to fix and flipping and a portfolio of 4 properties that are producing passive income.  

-----------------------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

I would rent both units out and should get $350 in passive cash flow.