It is what is left after snow removal, cutting the grass, utilities, tenant issues, parking lot issues, property taxes, mortgage payment, etc. that make a difference.

No management costs as it would be self managed, and estimated property taxes by the average of the past few years.

I also wanted to benefit from tax saving before the years end with a new property purchase.

My tax professional is stating that I would need an appraisal to show the lot/structure are valued at $400k if I try to claim $200k as a donation.

We all do the same thing, we just call ourselves different names and carry similar but different licenses:- CPA - Certified Public Accountant- EA - Enrolled Agent - Accountant - Tax advisor - Tax strategist- Tax consultant - Tax plannerIt all means basically the same.

How do we minimize taxes on the profit we're making on this first home? 

From tax stand point I would think you can separate from primary and be okay with IRS being that IRS will not be local code enforcement.  

You also don't have to pay state tax on income. 

If you aren't familiar with Baltimore, I would suggest it's a hard no and say that you are trying too hard to make cash flow happen talking Baltimore and tax liens and auctions.

Tax Savings:While it’s true that the stock market has been strong, real estate offers unique tax advantages that aren’t available with other asset classes.