Find the definition of “primary residence” in law, and define it for me… They would not or could not and only pointed out how within the city code, for that section specifically that the director “has interpreted” primary residence to mean one’s normal place of return… again, thats not even a definition.

@andre gala here's a link to the Zoneomics report on relevant regulations in Wheat Ridge.https://www.zoneomics.com/code/wheat-ridge-CO/chapter_4#PRDI'm not attorney or agent, so I'll leave it to you to interpret.

Which portion of the tax code do they reference / how are they interpreting it?

Sounds like they are having a wrong interpretation of active/passive.

You don't say what you mean by 'use up' is that to live on, to distribute and invest, or some other interpretation? 

I'm spending more time trying to understand and interpret all of the variables and inputs than I am in analyzing the deals I have on my desk. 

You seem to be focused on cash flow based on the emphasis placed on the 10 Cap in your pos but you also describe the neighborhood as "shady" which I interpret to be a lower barrier/ at best "C" neighborhood.

However, the method of handling the 1099 income on the tax return may vary depending on the circumstances and interpretation of tax laws.The approach your CPA has taken, where each property is reported separately on Schedule E and then adjusted on a statement for property 3 to match the total 1099 income, could be viewed as a cautious approach to ensure compliance with IRS reporting requirements.

Even professionals find this topic very complex and challenging to interpret.

I agree that putting "scam" in the title (even with the question mark) was a bit hot-headed.My interpretation of James' position is that there is no opportunity for further diligence on validity of leases (specifically, if they have been paid historically).