(you do not pay the taxes you lose the house, and you do not pay the insurance the lender will put insurance on the property for you)  Assuming the properties are showing up on your tax returns the income/loss will be calculated from the returns using this form:  https://content.enactmi.com/documents/calculators/Form1038.C...The form will allow you to add back your paper loss of deprecation on your returns as well as your property tax, insurance and mortgage interest deduction as those last three are already taking into account into your payment as mentioned in the first paragraph.

You can average these or choose the most comparable sale to determine a reasonable land value.Using a lower land value increases the building’s depreciable basis, maximizing your depreciation deductions.

This allowance lets you deduct up to $25,000 in passive real estate losses to offset other income (like W-2 wages).

I told the tenant I'd consider the current payment on time (as long as it doesn't bounce) since the money was deducted from his account on the 14th, the rent due date on the lease. 

Here is a framework to think about how buying properties creates the most tax efficiency for you.The 6 levers of depreciation:Lever 1 - % of LandOne of the components of a property is land.Land is NOT DEDUCTIBLE, so low value land properties mean more tax deduction.A value of your overall purchase will be assigned to the land or lot.You receive no near-term tax benefits for buying land.For example - If you buy a $2 MM industrial building outside a rural town on 5 acres, the land value could be $5k an acre.

Not sure how complicated your situation is, it is easy to miss necessary elections in order to claim appropriate deductions.

i.e. deductible for a roof replacement or replacing an HVAC unit or replacing a hot water heater? 

So yes, you need to set aside enough money to pay future taxes.Taxes are calculated only on your net profit - i.e. after everything is deducted, including labor & materials, holding costs, financing costs and business overhead such as marketing and driving. 

@Mike SmithyIts been a while since I was licensed in Texas, but I seem to recall that the landlord can only deduct actual financial loss, in the event of a premature vacancy.

The key factor is ensuring you have proper documentation to support all the transactions, deductions, and income reported.