You get at least as change from ordinary income tax to capital gains. 

Completely separately, employees pay ordinary income tax on their personal income.

Is it the same as ordinary income?  

We just put so much work into it (new fence, patio door, windows, roof coming, exterior paint, paver patio, furance, all the big ticket items) so while it hasn’t been hands off I’m hoping it will be from now on. 

Are they the same from a Tax perspective, Ordinary income versus long-term capital gain rates?

The downside of lending for me is that interest is taxed as ordinary income.  

And so on with other ordinary expenses.I wish you all the best as you try to change your habits of thought into those that bring you more peace.

Basically you’ve given them money.that is interesting   lenders who have borrowers walk away can file a 1099 C debt relief and this becomes ordinary income to the borrower . during the GFC the govmit put a halt to it as they did not want the million people who lost property to also have IRS issues. 

Should not be an ordinary lawyer, more those who could handle RE matters.I have a friend that had issue similar to yours, and was able to partially solve it ( he actually bought the unit that later he figure out was out of the ordinance and with issues in codes ).I meant partially cause it was a negotiation, and part of the addition out of the city ordinance had to be tear down.. but he didnt lose all of it.

Cheers,Buddy  The long-term rates have special rates.Those passive losses are likely ordinary income but suspended.