The landlord/tenant laws spell out exactly how the security deposit is handled -- usually you need to send an itemized list for any deductions and the remainder back within x days. 

Get the Nolo landlord tax deduction guide book.

All taxable items should be the gross amount instead of deducting the tax.

I would also have to pay out of pocket for the master pocket deductible, which can be anywhere from 5k-25k or more, depending how many claims the HOA has had.

Also up deductables.   

I have a $2500 deductible with a $250,000 limit.

@Bryan Mills from my understanding c corps pay taxes on net income not gross income so operating costs and any gross income that gets reinvested or paid out for expenses to accountants, lawyers, realestate agents, debt repayments (the initial 4 million investment being repayed is debt for the corporation a d deductible) are all tax deductible.

A properly set-up DST will both protect your assets and bypass the burdensome franchise tax that would be levied against a Series LLC or Traditional LLC.The Delaware Act expressly provides that “[n]o creditor of the beneficial owner shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the statutory trust.” 12 Del.

No you can’t deduct the losses on your w2 unless you are a real estate professional

Suppose, I‘m getting $12, 000/year ($2k/month) after deducting all taxes and expenses.