So not much of loss on their part unless the lease has 11 months left.I am interested to see what others have to say.

You may be able to offset the taxes losses on the new property.

Did you have to prove loss of income for this?   

If you want to take the QBI deduction or an ordinary loss you better be issuing 1099s...

Whenever there is an insurance claim on a property, it will remain in a national property claim database called the Comprehensive Loss Underwriting Exchange (CLUE) for five to seven years.

Or can they be written off as a loss/break even"?

Costs Non-recurring Closing costs - 6% of purchase priceMonthly  % Vacancy and Credit Losses - 5-10% of monthly rent Property Management Fees - 8-11% of monthly rent Real Estate Taxes - actual from folio # Repairs and Maintenance - 5-15% of monthly rent Rental Property Insurance - 2,000 Homeowners/Property Association Fees - 0 Capex reserve - 1% of purchase price Utilities  Water and Sewer - tenant Gas and Electricity - tenant  Garbage - tenant Cable, Phone, Internet - tenant - tenant

Unless you form a C Corp or elect C Corp status (both generally not advisable), you will have a pass through entity so the tax on your cut of the profit/loss will be calculated on your personal 1040 tax return.  

Basically I just want to be able to have walk away money of what we are paying in case of a total loss along with only having claims that would be above the $10,000 threshold and above.

It is always better to keep a tenant than to try to evict one - unless of course you are losing so much money that the vacancy loss is better than what you currently are getting - but this does not seem to be the case in your situation.