Reporting these expenses on your personal tax return (likely Schedule C for a sole proprietor) could result in a net loss that might offset other taxable income, reducing your overall tax liability.

When i read about how their deal was really messed up with most investor probably going to take huge loss's its not shocking.. you have to stay right on top of these and have the manpower to do it.

To add more weight to your case, dig deeper into local records.

.: Hi All,Is there any way to structure a private lending arrangement so that income is considered passive (by IRS standards) and can offset accumulated schedule E losses?

K-1 losses, generated through depreciation and cost segregation, can often offset distributions during the hold period, minimizing taxable income.

But if there is a job loss and can't pay then do the notice and or cash for keys program. 

No one I know is going anywhere to report their loss so you can research it.

Let's analyze each issue you've mentioned:1) Tenancy Length: besides issues a landlord can't control, like death, sickness, job loss, etc., the actual management of the property & tenant play a large roll in how long tenants stay in their home.

It is widely recognized as a loss leader within the industry and those who are successful normally have a complimentary business such as a brokerage or a construction company that performs complimentary services.

Sometimes it's best to cut your losses and move on.