@Mohammed Abdullah Under the passive activity rules you can deduct up to $25,000 in passive losses against your ordinary income (W-2 wages) if your modified adjusted gross income (MAGI) is $100,000 or less.

My real estate usually provides a tax savings that helps offset my ordinary income each year.

If I structure the purchase with him so that I do not collect income for 12 months, then he pays me for months 1-13 in month 13, will that payment and all thereafter be subject to capital gains vs ordinary income?

"Ordinary wear-and-tear" is something that would happen with most/all occupants.

I've seen pools rise completely out of the ground the pressure can be so immense.So it would not be out of the ordinary to find cracked plumbing or a damaged bond-beam in such a pool.I would hire a Pool Contractor to thoroughly examine the pool and give you a bid to put it back to normal and legal, operating condition.

It is not a run down low end property.He additionally scratched a new stove ceramic top with cast iron and my home warranty did not want to pay for it because they considered that a "vandalism".He seems to think the is ordinary wear and tear and even threatens to take me to court.

@Brit F thanks so much that was very thorough, I appreciate your advice! 

There are two things I use as a basic foundation for ordinary wear-and-tear:HUD GUIDE (scroll down to the last couple pages)Inter-NACHI Life ExpectancyKeep these handy as a reference, but they are not written in stone.My policy is this: do I have before/after documentation and am I willing/able to defend the charge in front of a judge?

It is always ordinary wear-and-tear unless you can confirm abuse or negligence.

We don’t plan to sell anything for a year so we only pay capital gain and not ordinary income tax.  38%??