@Tchaka Owen It's advisable that a taxpayer carry adequate and appropriate insurance for the business line. 

Let's also not ignore the fact that wholesalers are taxpayers and the majority get CPA's on board immediately after they assign their first contract. 

. §1.165-9(b)Property converted from personal use(1) If property purchased or constructed by the taxpayer for use as his personal residence is, prior to its sale, rented or otherwise appropriated to income-producing purposes and is used for such purposes up to the time of its sale, a loss sustained on the sale of the property shall be allowed as a deduction under section 165(a).(2) The loss allowed under this paragraph upon the sale of the property shall be the excess of the adjusted basis prescribed in § 1.1011-1 for determining loss over the amount realized from the sale.

@Curtis MaagSection 121 exclusion is given to taxpayers who sell when they lived and owned the property for 2 out of the last 5 years.The exclusion is $250,000($500,000 if married filing jointly). 

When an IRA receives income from a trade or business on a regular or repeated basis, it can become subject to a tax known as UBIT which is meant to level the playing field and protect tax-paying businesses from unfair competition. 

not reallyAnother level of complexion is losses that are passive may not be utilized to offset your other income while some taxpayers can. sometimes it's best to keep things simple. 

I thought that Portland did not have any accountants or taxpayers.

If the LLC is a single member disregarded entity as @Bryan Zuetel said then you are not changing the tax payer when you contribute that property into that LLC. 

I work extensively in representation of taxpayers before the IRS.

@Dan TrinhThere is a cash-basis of accounting and an accrual-basis of accounting.If you are a cash-basis taxpayer - you would normally deduct the full insurance payment in the year that the payment is made so long as amount paid for the insurance policy ends within the next year.Example - you can be eligible to pay and expense for an insurance policy that lasted one year.However, you may not be eligible to deduct a portion paid for an insurance policy if the policy lasted several years.In your case - if you paid for the $400 insurance policy in 2017 - it was a deduction on your 2017 tax return.if you paid for the $500 insurance policy in 2018 - it is a deduction on your 2018 return.If you paid $900 in 2017 - then you have a slightly sticky situation.