It's a small place so I'd guess it won't rent for enough to cover your expenses anyway so I'd probably sell, especially if the loss is small, it unless it's in a great neighborhood that you think will do well over time. 

I'll work with an attorney to assist with drafting that.Q2: Yes, I'll talk to my CPA but we'll most likely hold the property for at least 1 year under the LLC given our timeline to design, permit, build and sell the property, meaning I should avoid short-term capital gains.  

We have some capital and are looking to possibly purchase a small hotel.

I have to front a ton of capital.2.

Of course we can cut our losses and switch.

If they didn’t have replacement cost, what should they do to capture value and get a loss writeoff?

I know it's a long shot, but I'm currently having lawyers review the signed subscription documents to see if there's any way to minimize the losses here. 

Our parent company is called Legions Capital, Inc.

By diversifying, but still investing in the most promising deals, you limit the possibility of a devastating loss without limiting your upside.  

The loss of priceless art, jewelry, autos, memorabilia and watches could often match or exceed the property values.