You will file a 990-T and there are plenty of services out there to help with this. 

Since they can always file for the tax deed and get their money back plus interest, it is a no brainer for them and it's much more legal than laundering their money.

You must work at least 750 hours per year in a qualified RE business.So most people who have high-earning W-2 jobs outside of real estate won't qualify.But the unique thing about RE pro status is that even if you don’t qualify but your spouse does, you can both file jointly and claim the losses from your RE investments to offset your other active income together.It's an incredibly powerful benefit if you do meet the criteria.

Lenders title insurance policy should be obtained and all documents properly prepared and filed accordingly.

Years ago, I could file claims for small, even minimal, damages on my rental properties, like a few fence pieces blown off during a storm.

There will still be some involvement you will need in the deal.

So, the condo LLC had gotten the suit against them dropped and turn around and filed another suit against me.

This could involve a right of first refusal for the other party, buyout terms, and a method for determining the sale price.Rental and Use: Define the rules for renting out the property or parts of it, including how income and expenses will be divided.

I also call the local court system to see if anything is flagged on file. 

Uri Gofman, weren't you and Alexander "Alec" Vinokur from Realty Now all involved in an indictment for mortgage fraud?