As long as you have no other IRA accounts you can convert this IRA account that you didn't take a deduction on to a Roth IRA without having it be a taxable conversion.If you do have other money in a traditional IRA you cannot just convert the portion you contributed to the IRA, the IRS says the conversion has to be done proportionately to your total IRA balance. 

Therefore, treatment will mirror your own personal residence (i.e. most expenses will be personal in nature and non-deductible).Any rent she does pay you is taxable in full with no deductions to offset.Then you contend with the gift tax issues.Generally not a good idea to rent to family, but if you do, make sure the rents are fair market. 

The gains are tax-sheltered inside the IRA.If leverage such as a mortgage is used, then the IRA will be creating Unrelated Debt-Financed Income (UDFI) and will have a tax filing obligation.If the IRA is receiving income derived from an active trade or business as opposed to passive rents, that income could be deemed Unrelated Business Taxable Income (UBTI) and will require a tax filing. 

I have always assumed that this means if I make say 40K at my W-2 job and have a lot of rentals which with depreciation (or say a Cost Segregation Study) show a loss of 50K I can take my taxable income down to $0 and then actually down to a -10K, but if those losses were 80K, I could only go down to -25K, and then the remaining 15K would have to be carried forward.

Since the REIT is required to pay out 90% of the taxable income as dividends...are they not required to share the equity value to shareholders. 

Dividends paid between connected corporations are often non-taxable.

And NJ tax forms say that "net rental income" is taxable, just like income from one's job.

If I wanted to move retained earnings from my stock trading llc to my real estate llc how could I do that without the funds appearing as a form of revenue on the real estate llc’s books and therefore being taxable?

Having an equity split of flipping profits as a co-owner on the deal could create taxable income to an IRA known as UBTI.You or your entity will be the property owner.The IRA will lend to you or your entity, with a note secured by the property.  

—that is probably true, especially since the rival stock investing in this scenario would be had in a taxable account.