The fact that you held it for longer than one year does NOT determine the tax treatment.

Could well be a puppy mill, but enforcement about conditions there is sorely lacking due to lobbying by AKC and also lack of funding.  

There are 6 tests called the WhiteCo factors (named after a tax court case on the subject) designed to figure out the permanence of individual assets to see if they qualify for short life treatment.

I called an exterminator for a treatment.

https://www.biggerpockets.com/forums/530/topics/1056436-clearing-up-confusion-on-tax-treatment-of-short-term-rentals

@Theresa McGallicher https://www.biggerpockets.com/forums/530/topics/1056436-clearing-up-confusion-on-tax-treatment-of-short-term-rentals

@Craig LesslerYou should work with your tax pro to determine the proper treatment. 

Understand what other development requirements are for the residential units, for example, each unit may require an advanced treatment septic system (if not connected to sewer already.

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.