Are the subsequent year's taxes payed during the year waiting for redemption also subject to the 20% penalty and the 10% after the first year?

Once all the depreciation has been "recaptured", any subsequent receipts of principal are prorated between basis and profit.

If your notices don't take a progression approach (each subsequent one becoming stricter), then you want to get on that.

The intent of the LLC would be first and foremost to be able to sign a long term lease (to show secured income) to so that I can clear my debt related to the mortgage so that I can buy subsequent properties without waiting two years to show my short term rental income to lower my DTI so that I can qualify for additional loans. 

All of the properties not only got increased equity through the BRRRR but appreciated so we could use the equity to buy the subsequent buildings.   

Another option is looking at the smaller banks in the state you are interested in buying they are easier to deal with for example: Enterprise Bank & Trust in Kansas.  

Whether you are Schedule E or Schedule C, you have very distinct set of income calculations and subsequent allowable add-backs.

You'll need to find a good bank that understands what you do and create an enterprise account that work with that (plus you'll need to do it in accordance with all NJ laws).PM to Landlord Contracts - You are going to need a lawyer who understands property management and can write you a solid contract to have between you and your prospective clients.

In that case, the series of transactions would be viewed as a sale to an agent and a subsequent transfer to the principal, and the tax liability would be identical to the liability in Scenario #2c.

If it's such a good idea you have to ask yourself why the big boys -- Hertz, Enterprise, Alamo, U-Haul, etc -- haven't been doing it for decades.