I walked to the house and met a man who says he was cleaning out due to the loss of their mother in some few weeks back.The guy told me she is  left with 12 years mortgage on the property to pay the bank.

It doesn't cover any loss of income due to your rental being repaired.

Once a complete loss mitigation application is received, the servicer must review that application before starting the foreclosure process.""

Itemized breakdown has ridiculous amounts for damages, thefts of toolboxes, medical claim, loss of use etc.

There will likely be a partnership return required where you flipped a house with a partner and lost $120,000.If you sold the other property within the same partnership, it will also be reported on that partnership return.The net result to you is that you will receive a K-1 showing your income / loss which you then use to report on your individual return.If you made no money within the same year, you likely pay no additional taxes / get no additional refund.Best of luck.

@David Woodside The 500-hour rule allows you to treat rental losses as active, enabling you to offset other income and reduce your tax bill significantly.

.: Hi All,Is there any way to structure a private lending arrangement so that income is considered passive (by IRS standards) and can offset accumulated schedule E losses?

No, it would be a total loss.

The state laws (do not quote me) appear to not let these companies increase rates (or its not easy) to pick up the losses.

Is the cash flow loss a lot less than than the equity and what is the plan to be cash flow positive?