It's completely dependent on negotiation -- between the operating partners and the capital partners.Typically what you'll find in similar situations is either an LLC or an LP taxed as a partnership with a strong operating agreement in place that spells out income/loss allocation. 

.)● Gain included = (Reinvested amount - basis increase) = 1M - 100,000= $900,000.If A also sells the investment in QO Fund in Dec 1 2031, 10 years later, he does not recognize any capital gain on the sale of his investment in QO fund.If A sells the investment before 10 years, basis in the investment is based on the time it is sold:Basis starts with Zero and increases in this order■ Held for 5 years - 10% of gain reinvested■ Held for 7 years - 15% of gain reinvestedBasis at 5 years = 100,000Basis at 7 years = 150,000Thus gain/loss is determined based on the FMV of the investment less the basis at the date of sale.

Your losses should not be too significant unless you are accelerating depreciable assets.

I also have reserve account to operate properties vs using flat percentage eat mo for items.

It could take some time to build up reserves to pay for any large ticket item so you want to make sure you aren't caught having to borrow (if at all possible).

Restoration contractors deal with insurance losses daily, may already have a relationship with your adjuster, and will submit a proposal for the cost they need to have the work completed to "pre-loss condition" and your standards.

One item I would add is that not every lender needs 2 years of rental income. 

.) , but I am still unclear on how some parts are to be executed.The first three items they mention aren't figured out yet so no one knows how to deal with them yet. 

They tended to be more tenant oriented but it is still a loss.

Crying ….as you say not relevantHealth issue.... not relevantMarket rent...extremely relevantCost of tenant turnover....not relevant (cost built into expenses)The cost to you of reducing her rent is:late payments, chasing her for rent, excuse after excuse, ultimate eviction and vacancy plus a loss of $100/ month in the interim (plus a guaranteed lose of a minimum 1 months rent, if not more, before you ultimately get rid of her.)