I am guessing his hands are tied as Norada is simply the marketing company and I am guessing no operational control of Wagner.

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

I want to profit off the interest rate and perhaps offer 6% rate on what is left on the mortgage.

If her goal is to provide some of the proceeds to her ex in good faith, she can simply sell the property, have a tax professional estimate the taxable gains.

However, if you choose to stay there for a bit and sell you'll get the first $500K of profit tax-free if you've lived in it for at least 2 out of the 5 years prior to sale.

Sometimes you can bring to life an old cabinet simply by painting it, putting new hardware on, and maybe updating a light fixture in the room that shines brighter, and not yellow. 

So when my clients work with me, I simply guide them through the process of originating their own loan (legally, in the states that allow it).

Officers all too often think the know the law simply because they wear a badge, when they actually know a lot less than most folks. 

If this is simply you not wanting to accept partial payments and the rent is current, stop accepting it - and send a Lease Violation/Notice of Quit for Non-Payment of Rent - and force the full rent to be paid per the lease or start eviction.  

But you are required to file a Schedule E in the US every year showing the total rents you received, the expenses you had against those  rents and your subsequent profit or loss.