If you see your real estate investing as a single action or body then there are strategies to use to balance things out .

How do you know the seller didn't stick bodies in the units with awful credit, with great deals, to make the building look more occupied than it really is. 

One recommendation is that if you do wind up giving her the money back, get her to either sign a release, or at least text you with a message that says if she accepts that money back, she has no more claims against you.

Does any body know any good books that will assist.  

As of now the house isn’t in that bad of shape to get some bodies in there.

If I find a replacement tenant before that, you will be released from your obligations once the new tenant takes responsibility.

You can then put certain provisions in the agreement where that money (or part of it at least) gets released to you if you have problems with getting the tenant out or if the unit is unreasonably damaged.Of course, everyone has to agree to this, including your lender (if you have one).

My partner is an accountant familiar with the new tax codes that were recently released by the IRS, but I still have yet to see investors discuss this method.For those that do not know, if you invest in a business or improve real estate in an area with poverty levels 20% or greater, you can completely write off your capital gains in 10 years if you decide to sell the property.

@David Cholden I would get a release signed by both of them stating who should get the check.

Passive loss calculation/passive loss carryforward is done on form 8582.You will not see it on Schedule D or 8949 because those deal with sale of assets/capital gains.If you dispose of an activity with suspended losses - it gets released through form 8582 and then ultimately schedule E.This is prolly on the more difficult side of tax returns.