@Christopher FrazeTo clarify, you need to meet two factors:1) More than 50% of the personal services you perform in all businesses during the year MUST be performed in a real estate business you materially participate.2) You must work at least 750 hours in a real estate trade or business.If either you or the spouse qualifies as a Real Estate Professional then you will be permitted to deduct all passive activity losses from your rentals against ordinary income from whatever sources derived.

Obviously, this will be taxed as ordinary income. 

No digging up of the yard or concrete patio required. 20 year warranty.

A bedroom that has a private sliding glass door entrance that opens out onto its own patio.

Most common treatment is to treat it like a business =self employment income and then take a huge loss against your ordinary income

What about the crack in the patio you are standing on?

I see differing opinions as to whether a loss from a sale of a rental property is a capital loss or ordinary loss.

If it's still there the next day, dispose of it by whatever means necessary.Your state also has laws for property left behind by a tenant that moves out under ordinary circumstances.

For you investors that have ordinary income to write off let me tell you the greatest secret to minimizing tax liability, Cost Segregation.When coupled with zero down seller financed purchases the numbers get crazy.These numbers below are one of two parks I bought zero down with seller financing last year.This one park one year is a $140,834 write-off equal to $40,842 in tax savings and the second park is $14,000.I am projected to save almost $60,000 on two community purchases that I don't have any of my money invested into, they were true 0% down parks.Don't kid yourself, real estate is the best investment opportunity that exists.

Should be an easy fix to add a side gate, sliding glass door, french door, or regular exterior door and steps/patio.