SALT deductions are capped at 10k now, which in the NYC area is easily hit by even moderate income folks (relative to the area, would be considered high income most other places in the U.S.).

So, I'm curious to other's opinions as if I should sell, take the around $55k loss of the purchase price and then take that $40k that I could walk away with roughly (owe $140k, it's worth $188) along with my tax deductions accruing over the years and try buy something else that will cash flow better.

You’ll need your closing statements to determine which costs are deductible and which ones get added to the property basis.

@Philip OlivierYour tax profile is a little bit more complicated and such I think you should hire a professional(I am a little biased).Since you make $100,000 from your full-time job - you should be eligible to deduct the losses(if you have them) from your rental property so long as you don't have significant income from other sources including the short term rentals. 

As far as compassion goes...what is the legal precedent for a special compassion tax to be levied on landlords?

Is the interest on the second loan deductible against this rental?

Add or deduct those costs to what you planning to bid and compare with the market value.

You could also file a claim with your insurance, but unless your deductible is really low, I doubt it’s worth it.

I was surprised to find that depreciation was not deductible and loss was not reported as non-passive but passive so it stays with the LLC 1065 to match against income for 2018. 

Of those that stick around, 80% of them only sell 20% of the homes and the average income for an agent is less than the average income in America...and that's before deducting expenses like fuel, marketing, office fees, licensing fees, board fees, etc.