If it is a normal 70/30 leveraged property, you may end up subject to tax on 70% of your returns anyways - so cost benefit, is that 30% tax free portion worth the high tax rates paid and additional filing fees to get tax free treatment on the 30%?

Assuming this is proper in your situation, with treatment of a tax partnership, reporting would be as such with a Form 1065 filed, claiming all rental income and expenses, and then issuance of a K-1. 

-Has no crawlspace (common for older properties) so we couldn't see the foundation-Drywood termite/wood decaying fungi damage seen on all the windows/doors/parts of the beam on the exterior, parts of roof decking and rafters in the attic-Old leaks/moisture damage seen in the ceilings and attic-Parts of the roof has patch work-Roof doesn't have any permits on record (don't know how old it is)Seller's offer to me:-Fumigation treatment for drywood termites (tenting the house)-Replace and repair all damage wood throughout the house-Replace the entire roof with a new permit-Replace one window in every room (not all)-Pay for a structural engineer to inspect the foundation-Offer to get quotes for repairs and have a 15-20K budget to make all repairs, house is 500K.

This can allow for favorable tax treatment and potential tax deductions related to the properties.Management and Decision-Making: Establishing an LLC can formalize the management and decision-making structure for the properties.

So it qualifies for 1031 treatment. 

If in an LLC - it doesn't really matter who gets the loan then since the borrower on the DSCR Loan will be the LLC entity - not either you or your wife as an individual.DSCR Lenders can vary by treatment of who is required to guaranty the loan (generally around 25% ownership, >51% total) and which credit score is used for qualifying

I got the place treated then and have had annual treatments every year.

New to RE investing and trying to learnThis is dependent on the treatment of your rental activity.

It's my opinion that you should use a heat treatment and not a chemical treatment as heat treatments are comprehensive and can be guaranteed, and spray treatments do not always kill all bed bugs and can be a waste of money.

I'm looking at the proper treatment of the de minimis safe harbor election 1.263(a)-(f), specifically paragraph 6 which details the anti-abuse rule.