If I understand, this means that any loans that encumber the asset are deducted from the net profit, therefore lowering the taxable basis.

@Justin BrownYour CPA would be the best guide to determine what your gain would be if you decided to sell at your desired price as he would know your adjusted basis, tax rates, etcThe three most popular ways to defer taxes would be 1031 exchange, QOF and installment sale.

The issue with buying in cash is that most lenders want at least 6 months of seasoning before they use the appraised value for the LTV  -- otherwise, they're using your cost basis (purchase price + documented reno costs).

It seems like every day something is going wrong!

Unless you are on accrual basis of accounting.

The amount that you owe on the property doesn't affect your cost basis. 

It's typically on a case by case basis and will need more details to give to the underwriters. 

Do enough people slip through that it would be worth paying for a service on a monthly basis to be able to pick up the phone and have someone come shut down the party/monitor the property to stop a party before is starts, i.e. more people arrive than listed on the reservation? 

Definitely have a solid education basis before jumping in. 

It was an intra family purchase so I retained the old tax basis,  it's less than $400 a year.