It's ordinary Income

Here is a brief explanation of Passive activity loss:Passive Activity Loss Rules: A set of rules that prohibits using passive losses to offset earned or ordinary income.

When something out of the ordinary happens it not always a reason to get extra money.

My understanding is that if you make under $100,000 a year you can deduct depreciation against your ordinary income up to $25,000.

Over time the seal of double pane window will fail and result in condensation forming between the two panes..... ordinary wear & tear.... not chargable.2.

Well, not considering any cap gains tax, it's just about completely depreciated, so.....the prorated building portion of say $550 of her $625 purchase price, so somewhere around $500k in depreciation recapture taxable as ordinary income, max rate at 25%.

Make sure you clarify what will happen if they don't fulfill this duty.Here is an example from our rental agreement:1.LANDSCAPING/YARD CARE.Regular landscaping/yard care (mowing, edging, trimming, fertilizer, weed control) will be provided by _______________________.For all Tenants:a.Tenant agrees to keep yards, walkways, patios and decks clear and to keep premises free of junk and debris.b.Tenant accepts liability for all landscape damage and/or replacement of such, if caused by neglect, abuse or lack of water.c.Tenant may plant the beds adjacent to their dwelling to their liking, but only with those plants that are of appropriate size and type for the beds.All plants brought or caused to be brought to the property by Tenant will be cared for by Tenant.d.Tenant agrees not to cut or prune trees, hedges and shrubs.This will be Landlord’s responsibility.e.Tenant agrees to properly dispose of all plant debris and agrees to not leave such on the property.f.Landlord will consider special Tenant requests for planting and removal of plants, shrubbery and trees, but reserves the right to determine the make-up of the landscaping.For Tenants of single family homes only: a.Tenant agrees to mow, water, and keep the grass, lawn, flowers and shrubbery thereon in good order and condition, applying fertilizers and weed retardant as needed. b.If there is a failure of Tenant to keep the landscaping in good order and to follow these guidelines, Landlord reserves the right to hire a landscaping service at Tenant’s expense (after a 10-day notice to perform covenant).c.Landlord reserves the right to restore the landscaping to its initial condition, as it was at the time Tenant began occupancy, or if improved during Tenant’s occupancy, to the level of such improvement.

I explained the back yard situation and kind of played the part that I didn't really want to make the necessary repairs on a place that I wasn't going to own (even though I would have spent the $500-$750 to do it because that's the main attraction for this particular home and it would have paid itself within the first six weeks of listing) Long story short, he's upgrading the landscaping and re doing the patio around the hot tub and for not having to pay for any of it and him allowing me to use it as an Airbnb property I'm kicking him back 10% from the bookings after rent.

You are going to pay UBIT on the financed percentage or the ordinary income of the business.

Front patio, covered entry with columns , Windows where the garage was , relocate driveway to the side of the house and erect a rear garage , add brick facing and or hardy plank Larger Windows but now I've spent a load and haven't even tackled the interior.My question is how far to go what are the best bang for the buck renovations although I understand the basics i.e.