However, at the moment, the IRS and the government has classified it as property. 

I will say, however, that reading threads on any web site will not take the place of experience.

I'm a web developer/ real estate investor and I just started playing with Dapps, is anyone else working on similar application?

If your adjusted gross income (AGI) exceeds $150K and you are not classified as a real estate professional, passive losses from rental properties cannot be used to offset your earned income.

Is there any recommendations for how to work around this or structure the agreement to have the seller pay for the sewer without it being classified as a credit?

So be careful and make sure you interview the Expediter and that they have had success in obtaining the Letter of No Objection.As far as evidence that you need to gather, look up your buildings TAX Class.You will find it here: Building Information SearchHere you will see something that looks like this:NOTE that while this is a Dept of Buildings Web Portal, what I have circled in RED is the Department of FINANCE Building Classification.You may not have a CofO, but the Dept of Finance maybe taxing you as a 2 Family.

All I am asking is a reference to a bank that has a good web site that will allow me to do all my online transactions and be easy to work with.

I am looking to understand if there is a way to make MTR income/losses classified as active income (rather than passive) when you do not have REPS status?

Its still definitely a grey area and DSCR Lenders are different - but typically anything rented by the room (classified as "SRO" or "Single Room Occupancy") is an ineligible property type. 

Evan, looks like maybe what your referring to is that any personal property is classified as sec 1245 so the recapture on that portion is taxed as ordinary income (and rest of property is taxed differently).