You might consider cutting your losses and selling it, or investigate STR options.

According to passive activity loss rules, every business is obligated to adhere to specific criteria, especially when it comes to short-term rentals.

You will still be faced with the passive income loss limitation.In my opinion, continue buying quality real estate investments and allow the depreciation to shield your cash-flow.This will allow your real estate investments to grow tax deferred.

Schedule E typically caters to rental income and certain types of passive income, while Schedule C is tailored for reporting profits and losses from a business or self-employment. 

If you more than one owner/member in a LLC, the LLC will file a 1065 partnership return, but all that does is spit out a K-1 (like a w2 or 1099) showing the profit / loss that you need to report on your 1040 form.If the LLC is single member, then you will basically continue file addition SchE for your long term rentals. 

When income from rental properties is considered passive, it is subject to passive activity loss (PAL) rules.

Current CPA says you can form an LLC and take any losses as a K1 loss on your personal taxes. 

If a property is making no cash-flow, when depreciation is factored in it is a paper loss on your taxes.

Sam,I would add a couple things from the Insurance side:1. request copies of loss reports (AKA Loss Runs) from all their insurance for at least 5 years2.

And that risk of loss of that interest has passed to the buyer.