“Success is doing ordinary things extraordinarily well.”

@Christopher FrazeTo clarify, you need to meet two factors:1) More than 50% of the personal services you perform in all businesses during the year MUST be performed in a real estate business you materially participate.2) You must work at least 750 hours in a real estate trade or business.If either you or the spouse qualifies as a Real Estate Professional then you will be permitted to deduct all passive activity losses from your rentals against ordinary income from whatever sources derived.

Obviously, this will be taxed as ordinary income. 

Most common treatment is to treat it like a business =self employment income and then take a huge loss against your ordinary income

I see differing opinions as to whether a loss from a sale of a rental property is a capital loss or ordinary loss.

If it's still there the next day, dispose of it by whatever means necessary.Your state also has laws for property left behind by a tenant that moves out under ordinary circumstances.

For you investors that have ordinary income to write off let me tell you the greatest secret to minimizing tax liability, Cost Segregation.When coupled with zero down seller financed purchases the numbers get crazy.These numbers below are one of two parks I bought zero down with seller financing last year.This one park one year is a $140,834 write-off equal to $40,842 in tax savings and the second park is $14,000.I am projected to save almost $60,000 on two community purchases that I don't have any of my money invested into, they were true 0% down parks.Don't kid yourself, real estate is the best investment opportunity that exists.

I am seeing a very ordinary deal here, and that is probably a good thing.

I went from TurboTax while on W2 with ordinary investments to a small biz CPA to now a CPA firm that can do small biz/REI and they're exceptional with their knowledge. 

Whereas any income you get from lending your money would be taxed as ordinary income.