What happens if he mismanages it and you end up losing money - do you split losses 50/50 or do you get your capital returned 67/33? 

I mean what could go wrong with no trucks to move supplies and food in a state that large......? 

Not exactly sure how this would work to make sure we are taking advantage of the loss reported for our own personal taxes.

There are ways to deal with these situations, and it depends on the property and the lien holder, but it's possible to do some pretty incredible things if you are willing to invest a little more in legal costs to close the gap on your losses.  

Probably due to all the losses they've been experiencing with all the wildfires, floods, etc. of late.We even have a case right now that required the owner to sue their own insurance company, because the insurance company denied their claim on an alleged technicality.

I do my own taxes with TT Premier, but I'm also a seasoned accountant and create my own schedules for depreciation and tax loss carry forwards.

They pretty much haven't been in the place for the last 2 months (water was shutoff in December last year), there is still food in the fridge, the microwave is growing its own forest, trash everywhere, food everywhere, the walls/carpet are just... nasty, and I won't even describe the bathrooms...

For low income cheap Cleveland houses you need insurance to be there for you in the event you have a total loss.

Get her out now, cut your losses and move on 

If, for example, I could get hard money to purchase/repair and pay off in a year, I'm confident I could do so without loss, but only if the payments could accrue in the background, collecting interest, without being paid until the house sells.