The financialstate of America has ordinary people afraid.

For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it isn’t available for rent.Vacant rental propertyIf you hold property for rental purposes, you may be able to deduct your ordinary and necessary expenses (including depreciation) for managing, conserving, or maintaining the property while the property is vacant.

yes it's legal because the income is not on ordinary income but on passive income in IRS eyes, they would not check anyway.

The tax benefits are also great.Where interest earned from lending personal money is subject to ordinary income tax rates, interest earned in a traditional SD 401k retirement plan is tax-deferred or tax-free through a Roth SD 401k plan.

You are paying ordinary income rates on the interest -no way around that.

Interest income from lending is taxed at your ordinary income rate.

  - Any payments made on the note will be recognized as income for you and subject to capital gains tax - Interest accrued on the note will be subject to ordinary income tax rates in the year you receive the paymentsHow to navigate around this1. 

And, while I can't speak to Gulf Shores or the panhandle specifically, I know a number of friends that bought a property assuming Airbnb/STR would be the saving grace, to be out of the business within 18 months because they could never push rents because they had an ordinary product competing in a sea of ordinary product. 

you should get a RMLO or an underwriter to qualify the borrower. if its owner occupied and in florida you also will need to use a third party servicing company to service the loan which will run you around $450/yr. not an accountant but its my understnding unfortunately the interest income is going to be taxed at ordinary income and the principal will reduce the principal. how you offset the losses talk to your CPA.your best bet honestly is to just sell it and bite the bullet. 

If you sell property regularly as a primary business, or in the ordinary course of your business, you could be labeled as a dealer/developer and have your property classified as inventory rather than a capital asset.