I’m a bit of a nerd with an analytical streak, attempting to break out of my shell and be more social—so if you see me in real life, get ready for a nerd trying to be outgoing!

If the unit does not comply with local codes (like proper egress, zoning approvals, safety standards, etc), it cannot be legally rented regardless of how it’s marketed.The safest course of action forward, would be to bring the unit up to compliance with chicago's zoning/ building codes before attempting to rent or advertise it. 

This is what can go wrong when you have beginners wholesaling who have no training in real estate, no experienced managing broker to go to for advice, no license, no E&O insurance, no knowledge of how to avoid scams, no regulatory body to answer to, no relationships with other quality people in the industry like title companies, lenders, contractors that they can refer to help people, etc. 

It was the only operation like it in the country as could be found through regulatory bodies and it was deemed compliant.

Well....should you invest in a city where the people elected a woman with foreclosures, liens, judgements, garnishments, ethical violations from the state ethics board,  misused a city credit card, went three years arrears on her federal taxes all while yelling for other people to pay "  their fair share, " left skeletonized dead bodies hanging over Canal St for months on end covered only by a tarp until the wind blew it off to reveal to our horror her blatant disrespect for human dignity?

Attempting to collect from someone who has no incentive to pay will drastically lower your chances to actually get the agreed upon money. 

First step would be to talk to the controlling government body about what you can do with it.

How is this attempted by other, less informed, tax pros on the return?

I recently attempted this with an FHA loan for a client, but it was unsuccessful.

While all the posts have at lease some legitimate points, I personally believe camp 1 is missing the opportunities present to protect assets under US law mostly because they don’t either understand asset protection, or don’t want to bother with it, so rather than do a proper evaluation they dismiss it as something that won’t work to justify their unwillingness to entertain the idea.Camp 2 is deluding themselves - which delusion has been enhanced by charlatans writing books, giving seminars, and selling packaged plans all of which either attempt to hide your assets or hide the ownership of your assets.