Some factors to consider are appreciation and tax strategies.

It is a tax write off.

You'd need to show the income on your tax returns and/or have a lease and first month's rent/security deposit for the unit you were living in.

(As AZ and your current state will fight over who gets to tax your gains with the federal government.)I have to throw most of the shade on your horrible tax guy/cpa who didn’t tell you renting it out was a $50-$100k mistake. 

Lots of depreciation you will pay no tax maybe even shield some W2 income.B.  8k maybe 10k if you pick the right guy to lend your money to in interest income you will be paying much higher tax rate on this income FYI no depreciation expense. 

Keeping clean records from day one really helps when tax season rolls around.

Given the market conditions and your hard money loan, it might be wise to first calculate your monthly holding costs, including loan payments, taxes, and maintenance.

From a tax perspective, you'll want to take what you paid for the property plus calculate the improvements you made to the property during your time of ownership.

Hi All, any input on renovating a house and possible tax exemptions under an LLC?

@Tyler Speelman, A 1031 exchange solves the tax issue.