If your family qualifies, you can offset your active income with your real estate losses.

We are also getting a forgiving loan of 30k for the duration of 10 years from the county for 1 unit if we rent out the 1-bed basement unit to a household with income less than 100k and at the rate defined by the city )(~1183+ utilities) for a 1 bed unit.

Jennifer - If you have vetted the prospective tenant thouroughly (i.e. credit check, income qualifications, etc.), you shouldn't have to worry whether or not you sign them up for a 1-year lease or a month-to-month. 

I would require them to show proof of income to verify they can afford the increase, then make them sign a lease.

@Grant Gibson there's a great book called Passive Income In Commercial Real Estate by James Kandasamy. 

We are already a fortunately high net worth family. however, that is from my spouses W2 income, so at this stage we don’t really have anything tangible to “leave behind” and we want to try to build generational wealth for our child. 

How much monthly rental income are you shooting for? 

You mentioned a prepayment penalty, more information on DSCR loans available below.DSCR loans won't use your income to underwrite the loan.

I want to take advantage of the 0% LTCG rate up to 90k-ish MFJ + standard deduction, but if I use all of my capital losses realized in 2022 against all of my income from 2022, I will show zero income.

The CPA actually does not do our income tax.