Quote from @Felicia West: Thank you, Zachary for your very thorough explanation.Quote from @Zachary Jensen: Hey Felicia, At a high level you’re correct that when you and your husband’s income exceeds certain thresholds (over $150,000), passive losses from rental properties, including depreciation, can’t offset your W-2 income unless you or your spouse qualify as a Real Estate Professional (REPS).

It shouldn't be a recurring scenario (or it looks a little less "accidental") but in cases like this, your job is to simply have the correct intent, see what you have done to demonstrate that and build your case.

My gut tells me that Texas, particularly Austin and Houston, could be where the next wave of growth and expansion occurs, mainly driven by strong business and job creation trends.Here’s what I’m looking for in my US investments:Free-standing houses with a good land component, at least 3 bedrooms and 2 bathrooms, and in well-maintained condition.Budget : Will have to keep a factor of safety for the current exchange rates of AUD.USD = 0.68 so will cap our budget at 250K- 300K.Yielding over 6%, with a slight cash flow positive outcome, while also offering medium-term capital appreciation potential.Holding for at least 5 years or more, with a view towards steady growth.The long-term goal is financial independence, reducing reliance on salary-based income, and building assets during this accumulation phase.Debt reduction is on the horizon—looking to consolidate and start winding down debt within the next 7 years.If anyone has experience investing in the Texas real estate market or any tips on navigating US property investments, feel free to share your thoughts!

Local Economic Indicators: Monitor local employment rates, population growth, and housing inventory to time your deals correctly.

Those who commented are correct.

Hey Joe, Having a large number of rental properties and installment sales can certainly make your tax return voluminous, but as long as you're maintaining accurate records, filing everything correctly, and reporting all income, the size of your return itself is not necessarily an audit trigger.

Record lease data using software or spreadsheets, correcting any errors or discrepancies.   

If I understand you correctly, they can't even access their food or clothing, so this will be a big impact on them for a period of time.

You won't know the ARV correctly or the repair costs so your budgets will be crap.

I always worry that correcting them or trying to contradict them will come off as condescending and do more damage than the review itself.How do you all handle reviews like this?