Do you then sell for a loss or do you turn it into a rental?   

This lends to going down the path of possibly providing the tenants with financing, installment contract, disguised sales, delayed closing transaction, equitable interest, refunds, lawsuits, loss of profits... etc.

Are you saying that you have RE net losses of $10,000 per year?

While it may seem unfair, many business are not allowed to depreciate capital expenses at all, rather gains/losses are figured at sale.

This lends to going down the path of possibly providing the tenants with financing, installment contract, disguised sales, delayed closing transaction, equitable interest, refunds, lawsuits, loss of profits... etc.

You still get the net loss carryover right?

This lends to going down the path of possibly providing the tenants with financing, installment contract, disguised sales, delayed closing transaction, equitable interest, refunds, lawsuits, loss of profits... etc.

Appreciation is not something to be ignored and just because it includes ALL profits and losses, even the ones you don't like or can't control, is no valid reason to not use IRR IMO ... just because you can't control it does not mean that it isn't important and should be ignored.

If it does then you determine the reduction of income based on the loss of rent from you living in one unit.  

People do not understand that if someone makes 1,000 an hour then you asking them questions for free for 2 hours results in a 2,000 loss of productivity.I have learned a lot on this site so believe in giving back.