The story behind this guy was he had an extra property that he had to kick his son out of because of drugs and such.I asked him if he would sell it for what he owed on it and he said yes.

do you think this would attract that type of tenant who is possibly selling drugs or doing other illegal things?

While I won't defend him on run down rentals I think it is unfortunate that society wants to hold him responsible for vacant properties and drug trade which he did not create.

It is the reason my Mom and Dad got divorced when I was 3 yrs old was because of his drug and alcohol issues.

Is it illegal to ask potential tenants if they can pass a drug test? 

It's my understanding that public comment closed last April concerning the accounting treatment of and the equities in option contracts under a proposal by the FASB, and that the IRS will be adopting changes being phased in next year and to 2017.

I'm not a CPA, so don't take this as an authoritative answer, but my impression is that in most cases a real estate asset held at least one year should be eligible for capital gains treatment.    

I happened to have the criteria of no previous evictions as well as no smoking and no drugs. 

I'm pretty sure that in both cases, if I wanted just the termite inspection for some reason, I could have paid a lower fee and gotten that.Keep in mind that I'm very new to this, but my thinking goes as follows: If you know the house needs (say) $50K of rehab otherwise, and you have to open up enough of the walls or floors that you'll probably see any damage that is already there, then skipping the inspection and maybe having to spend another $2K on treatment if you find damage is probably not such a big deal. 

If the CPA is even talking about the Tax Court's treatment of something, that would be legal advice and improper.