However, the state placed a lien on the property which led to the seller declaring bankruptcy. 

Instead, you have to declare any profits from those sales as income that year – even if you buy another property.Note, too, that if you have real estate profits designated as income at the federal level, that could have state income tax ramifications as well.

Long story, the basement was declared illegal.

I do have all family members included in the landlord declaration form with the township.  

I've seen people who declared bankruptcy with scores in the 500's.It's possible that you're a victim of identity theft.

I could tell you more if I were to look at the declarations page, but it definitely sounds like you could use to have your coverages reviewed at least. 

If I declare bankruptcy then my wages cannot be garnished either.It may work better for you to have both of you own rental property, but you might consider only you owning it and keeping your primary house and paid off units as tenants by the entireties.There is a lot more to this, I have given a pretty simple version, but hopefully you have the idea.

Ask your tax professional but yes, that's income you need to declare if they pay to reinstate, regardless of whether it touches your hand or not, unless its structured somehow differently, that passes IRS sniff test.

Assuming you're investing in your area, you just declared you want to be worth $100 million minimum.

The town this rental is in recently passed a law declaring all water bills the landlord's responsibility.