The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

Britt,My firm has evaluated some smaller properties (under $500k) in the past for cost segregation, and it generally does not cost justify moving forward, since the benefits are small, and typically the tax liability on the income is minimal if any.

Our lease contains a clause stating the security deposit cannot be used for the last month's rent. 3.

How does this look from a tax perspective.

If you need financial help, ask under the "Finance, Tax, and Legal" forum.

The property is distressed (unpaid taxes for 2 years).

We pay all of our expenses out of that which includes: broker split (my brokerage takes 22% of the total commission, this varies by brokerage and is typically anywhere from 5-50% depending on how much support the brokerage provides and whether or not the agent is on a team), transaction fees, transaction coordinator cut, income taxes (15-20% of what's left after broker gets their cut), errors and omissions insurance, MLS fees, board of Realtors dues, required continuing education costs, vehicle and vehicle insurance plus maintenance, repairs and gas, health insurance (also health insurance for the family if they are the sole breadwinner), technology fees, desk fees (office rent), marketing materials, advertising/ lead gen, etc.

Not sure if it’s already been discussed in this thread but have those that built ADUs experienced a significant increase in property taxes?

That's 50k a year gone and you are losing tax write-offs and equity potential.

It's almost like they tack on a few hundred dollars to the order and forget to charge sales tax