. :)Not even mentioning quality swaps, trades, allocations to partners, how to find motivated note holders/sellers, servicing or collection guarantees, buying as a servicer while using a sub servicer, "wholesaling" the REO or cash for keys options and I'm not getting into modifications as that has endless possibilities.    

Danielle Danielle,You are required to pay yourself a salary if you are taking money out of the business other than paying back amounts you have loaned.Even if you are a partnership you still have to allocate funds to wage like payments called "Guaranteed Payments" Those are subject to SE Tax.  

What you're getting is from local agency allocations, they owe regardless of congressional appropriations unless it's in the lease. :)

Then, the total capital gain would be allocated based upon this percentage, and you can then exclude the amount allocated to your primary residence up to the $500,000 limitation.

What do you mean by allocate the gain to the rental years?

You would need to see the actual note document to be sure about any particular loan, but the general terms are standarized:http://www.law.cornell.edu/uscode/text/12/1701j-3(d)Exemption of specified transfers or dispositionsWith respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—...(4) the granting of a leasehold interest of three years or less not containing an option to purchase;...This section gives a exception to the due on sale clause for a normal lease as long as it three years or less.

It comes and goes in different forms as they allocate funding to it.

PMI is allocated to loans which exceed 80% LTV for one single loan.

In most cases, the expenses for such will have already been allocated to the Seller.

So, with the fudged numbers and percent allocated for expense the numbers work out and the property cashflows with the proposed loan terms.