Also if you arent a warning incase you see the taxes paid last year from a primary owner you may have to pay more as you wont have that deduction in property value. https://www.phila.gov/services/property-lots-housing/propert... 

It's the same deduction as paying any other expense.  

This is where you report negative income amounts, including NOLs.Calculate the NOL Deduction: The NOL deduction allows you to carry the loss forward to future tax years to offset taxable income.

This could include reporting expenses, depreciation, and other relevant information.Filing a tax return allows you to take advantage of any available deductions or credits that could offset other income or reduce your tax liability in future years.

3- Can I use this strategy and deduct all business expenses if I finance the property with a secondary home loan, or should I only get an investment loan?

@Amit ShuklaCreating an LLC does not give you any extra deductions.

Can I claim the deduction of $80,000 * 0.60 = $42,000 against my w2 income in the first year? 

I know this would likely be a touch lower since I'd be deducting any renovations or selling expenses, but just left this for simplicity.4) Added together my after tax sales proceeds and cash flow to arrive at a 10 year number of $1,255,274.Considerations:I found it coincidental that both numbers were within $1,000 of each other.

In CA there is a tax deduction.

You do need to have everything that is charged for itemized and  send that letter showing deductions within the time frame required by your state.