The W-2 income does not limit your deductions.You are entitled to write-off as much as you want.The next question is, is the overall loss considered passive?

And if they're smart they can maybe get a tax break for it, if they can show a loss on paper.

Keep your sites clean, reduce your liability exposure, keep your loss run reports clean and premiums from increasing. 2.

Then I will deep dive the asset.I agree that you lose control also, but new investors doing a flip and trusting a contractor they met on Angie's List is way more a loss of control I think.

I see story after story of people being upside down and having to sell at a loss because they chased the shiny object without enough due diligence. 

Note: I personally don't want to pursue pre-foreclosures, it's tricky and too easy to run afoul of Loss Mitigation laws in MD. 

If you have paid, like we did, swallow the pill and learn what you can.

Motivation is an emotional response to a circumstance, not the circumstance itself.Someone in foreclosure, job loss, tax liens, are all circumstances.

That's going to be a hard pill for most folk to swallow. 

Prior year losses.