It sounds as if you would like to drastically reduce your taxable income and the best way to do that (with real estate) would be to have your wife classify as an RE Professional.

Per FTB, the filing requirement is as follows:  All LLCs classified as corporations that organize in California, register in California, conduct business in California, or receive California source income, must file California Form 100.

Guess you could classify that as a bad investment.

I think one of mine is classified as a luxury, for its market.  

It's very common for a property to be unprofitable in the year of purchase but I wouldn't classify them as cash flow negative because they're "in the process" of being a stabilized asset.

They do not pay the franchise tax, since they are classified as estate tools, but allow you to separate assets into series. 

They’re not in the hood, or what some might classify as “war zones” as some describe specific neighborhoods, and they’re a great part of my portfolio. 

People sleeping in tents, vans, and tiny houses on wheels, are classified as accessory recreational vehicles in the zoning code and are subject to the requirements noted in paragraph 20.

People here on BP will classify the area as a "D" area.

As an agent, part of my sphere of influence is everyone at the college where I work which consists of 22,000 students, 1,200 faculty members, 500 classified (support) staff and hundreds of temps.