First - Have a discussion if the rental loss will immediately help your tax situation. 

My CPA was unsure... do you issue 1090-NEC for the difference between 1099-K and 1099-MISC or do you double up the income (i.e. 1099-NEC for gross rents from PM, 1099-K of the net owner distribution on 1099-K, then owner reports double income and puts a line item expense for the 1099-K since 1099-MISC covers gross rents).You need a new accountant lolPM issues 1099-MISC, not NEC for rental income paid to property owners.You would still issue the rental income paid to the owners regardless of the payment method.The Property Owners should add an expense line item on Schedule C stating that income reported twice on Form 1099 to offset any duplicated amount.

Lenders want to see income, not negative cash flow, even if the loss is just on paper from depreciation.

So losses from that specific rental may be utilized. 

You've given me some solid pointers/items to take into consideration for future deal analysis, so thank you for that.

Here's my situation:2024:- W2 income: ~ $1M (married filing jointly in CA) LLC profit: $80K (from 2 real estate flips, in NC on spouse's name)Capital loss carryover: $380K (from stocks in 2023)In what cases can my LLC profit be treated as capital gains? 

STRs do not require you to be a REP in order to take losses against ordinary income.

Profit and loss will be a guessing game. 

I have  a W2 job and look forward to the losses this year to offset some of my income (Not my 'WHY' for running an STR, but a nice bonus).

I've accepted that I will take a significant loss on this, and have already learned a ton from it, but I would like to reduce the total loss as much as possible.