Then you have wiped the slate clean on the loss carryforwards, that $200k of released loss carryforwards offsets ordinary income first - so you will actually get a great result.Then, in 2025, when you have no more pass loss carryforwards, consider making that real estate professional status aggregation election, and utilizing cost segregation on properties you acquired in a prior year.Of course all of this - get some real tax help, I'm just another guy on the internet here, and there should be a deeper dive on the circumstances than what you can get through a forum posts to ensure this all actually works properly in your situation.

Under normal circumstances a fee to manage the contractors and construction process seems appropriate, but one of the GPs owns the construction company that was used for the renos.

A good realtor can generally help you win a bidding war with a higher earnest money and a fast close with no inspection if that was the case.Under the current circumstance you could pull out just enough cash that will allow the home to cash flow based on a LTR.

Ultimately, I sold the property for about break-even because of personal circumstances that changed in my life.

When it is a new development, it isn't uncommon to see someone use the date the Certificate of Occupancy was issued - perhaps that marks the "ready", but it still might not be "available".So you can certainly have a property in service in a given year, but not actually have any rental income - but certainly your facts and circumstances are much better if you can actually get a tenant in there, that (should) shore up your defense on that question ever coming up unless you are playing weird games just to get a given in service date for tax purposes.

I think personal circumstances are ready, and I just need to learn and get the local knowledge you mention.

That said, it is not always best to go a specific route, it mostly depends on your specific circumstances.

In either circumstance, the door must look as it did when they moved in.

What would be a circumstance where I would be allowed to be compensated?

Even with supposedely wells creened tenants, you never know when they have a life circumstance and someone loses their job, dies, gets sick, divorced, etc and everything changes.