@David Friedman I love this.You have huge parking options.You have two arts and cultural destinations there.I think your idea of attracting a restaurant is a great idea to help with the place making of that corner. 

question I had is I got estimate to do a $30,000 renovation on the section 8 property.

Normally in a spot like this, we would recommend to a client that you sell your primary residence and claim your capital gains exemption under Section 121, but you have two strikes against you: (1) you have not lived in this property long enough to qualify for that, and (2) I'm hoping you already claimed an exemption on the sale of your other primary residence a few months ago, and you can't claim Section 121 exemptions within 2 years of each other. 

So in the General expenses section, I just added a negative entry equal to the cashback, thereby reducing the expenses I can deduct.

Bonus depreciation and Section 179 allowances for improvements can be utilized, with the latter, however, capped at zero to prevent negative losses.

Bonus depreciation and Section 179 allowances for improvements can be utilized, with the latter, however, capped at zero to prevent negative losses.

https://www.irs.gov/publications/p527/ch03.html#en_US_2015_publink1000219118Skip down to the section "Limits on Rental Losses".

Section 121 allows a taxpayer to exclude $250,000 of gain($500,000 if married filing) joint on the sale of a personal residence that was lived in for 2 out of the last 5 years.

(2) I have a Section 8 applicant and know that I am required to include them in the applicant pool, are the laws around do I have to prioritize section 8 tenant?

The decision to use Schedule E or Schedule C for reporting rental income from house hacking can depend on various factors, including the nature of your rental activities and how you've structured your rental business.Schedule E is typically used to report rental real estate income and expenses for individuals who own rental properties as investments or passive income sources.Schedule C, on the other hand, is used for reporting income and expenses from self-employment or business activities, including activities that are considered to be actively managed.The interpretation of the tax code and the determination of which schedule to use can vary based on individual circumstances and the tax preparer's expertise.Your tax preparer may reference relevant sections of the IRS tax code, such as IRS Publication 527 (Residential Rental Property), IRS Publication 334 (Tax Guide for Small Business), or other applicable publications and regulations.Factors that might influence the decision include the level of involvement in managing the rental property, the intent to generate passive income versus active business income, and the structure of your rental business (e.g., sole proprietorship, partnership, LLC).Ultimately, it's essential to work with a tax advisor or accountant who understands your specific situation, goals, and the nuances of rental property taxation.