I know every subcontractor, I priced every material, I facilitate it start to finish on weekly calls.

What is required is material participation, not substantial services.

@Christopher FrazeTo clarify, you need to meet two factors:1) More than 50% of the personal services you perform in all businesses during the year MUST be performed in a real estate business you materially participate.2) You must work at least 750 hours in a real estate trade or business.If either you or the spouse qualifies as a Real Estate Professional then you will be permitted to deduct all passive activity losses from your rentals against ordinary income from whatever sources derived.

Costs for repairs & cleaning are billed at $25/hour plus materials & supplies.

The backyard was mostly broken cement and terrible metal fencing.

If not much time at all, then no, the rental income is not subject to KC income tax.The IRS defines active participation in an activity of 250 hours or more a year, material participation as 750 hours or more.

Material participation (there are 7 tests you can use). 

Assuming that John’s wife is managing the Airbnb Rental and qualifies as a material participant, John Doe’s family can deduct $150k from their w2 income for the year 2022 (Bonus depreciation 100%).This would equal $33,000 in a tax refund for the family.

Materials alone will probably run the 2k-3k plus labor on top of the patches here and there.

There was an old superfund in the 80s to clean up metal contaminants in the soil from the old mining activity, so maybe check into that if.