Possibly hide it under miscellaneous expenses or subtract from total rental income.

Is it 10%,15% or more you have to decide what you want.So, Expense’s minuses total rent, (this means after vacancy rate is subtracted) – = NOI – P&I = cash flow / by down payment = Cash on Cash, in other words how much Money are you going to make each year on your money……..Expenses Are;Maintenance anything you can think of.

IncomeCurrent savings Rent (assume higher than usual vacancy rates and lower rent than standard to be safe)Cost:Living expenses (be conservative and allocate over what you typically spend)Tuition and booksProperty (be conservative and assume higher maintenance costs than typical)Be more conservative with your assumptions than you typically are --> estimate your monthly outflow based on tuition and living expenses.With your conservative estimates, subtract cost from income over the duration of school (come up with monthly and quarterly forecasts).

The rules will be different.Obviously there are pros and cons:Pros: -asset protection-ability to quickly add/subtract partners-ability to scale up or down quicklyCons:-costs to setup-costs to maintain-more rules to maintain properly-higher loan rates and costs-transfer tax due if transferring from your name into an LLC

Read Here where Federal Court rules rental inspections unconstitutionalCUT AND PASTE --ADD OR SUBTRACT-- But send something today, please.Also forward this to everyone on your email list--even if they do not have property in the City of Lakeland--what we all need to be concerned about is that once it is passed here--other area municipalities will follow suit.

So a normal course of action would be to take the boot of say $100K that would be used to buy out the members interest and first subtract the taxes caused by having to take the boot to buy them out. 

This can be calculated by starting with the annual rent and subtracting annual expenses, then dividing that number by the total property cost and multiplying the resulting number by 100 for the percentage.

If the rental property activity shows a net passive loss (after all deductible expenses including depreciation are subtracted from rental income), then that net passive loss is used in the following order:  (1) offset other net passive gains, (2) offset other ordinary income subject to MAGI limitations and active participation rules, and lastly (3) carried forward to the next tax year.The general answer to your question is yes, a net passivle loss from one passive activity is first used to offset passive income from another passive activity.  

On the flipside, those expenses also subtract from the amount of income that you show on your application, and therefore your DTI (Debt to income) which is usually the bottleneck in the process. 

In your case if you took $12,000.00 up front you subtracted the $1,000.00 you are allowed to take, you would be penalized based on the $11,000.00 extra you are holding.$11,000.00 X 3 = $33,000.00In Massachusetts there is no explanation that the courts will listen to.