You also need reserves for vacancies, general emergencies, etc.so the real take away is that you did not make $27k on those properties for the simple reason that you failed to adequately calculate your expenses.a labeled account for reserves shows your intent and helps justify your deduction.

The house is paid off free and clear, but we have no intention of selling it; we want to keep it in the family and turn the lot into a vacation home, Airbnb, or even a rental.

My initial intent was to sell the property to another investor to increase my capital and invest that into other projects, but I have changed my mind and want to use it as a rental.

Hey Alex,Why are you putting such a large amount of money down when your intent is to just take it back out?

You mean the buyer had no intention to buy it, they’re trying to assign the contract to someone else?

I have no intention of writing anything false either accidentally or purposely.

@Noa Zell, The 1031 is out because your intent is not to hold for productive use. 

If she is not the previous owner, she'll get the remainder of a  bonafide lease if she pays or, 90 days if she doesn't.Nothing is going to stop you from being sued if someone is intent on suing you.

The intent of my post was to share this idea with those interested as an option to consider.

Here's an overview of some common ways to invest in real estate:Buy and Hold (Long-Term Rentals):Purchase properties with the intention of renting them out for monthly income.