This calculation also assumes that personal exemption and itemized/standard deduction weren't used to further decrease the income.It appears the gain will be a lot lower resulting in a lower tax. 

That said, I'm tempted to present a much lower offer to the seller and attempt a cash for keys deal with the squatters.

Instead, we may just lower our offer.Any words of wisdom or suggestions?

There are places int he Midwest however, that will give you bigger cash flow, but potentially more problems regarding repairs (older areas) lower class neighborhoods (depending on how cheap you go).Indiana, Ohio, etc has some opportunity.  

That being said, I don't plan on living in NY my whole life, but want to find a way to househack so I can lower my living expenses while I'm there.

You could charge a bit of a higher interest rate, require a decent down payment and discuss that you’ll be there to give advice and help, but they are responsible for the whole ‘business’.If you do your vetting properly and help them succeed, you could lower your tax bill and create a long term income.Maybe this is a terrible idea for real estate and/or you just want to dump the homes and walk away.

My place is in downtown SF, when I charged lower, I got party kids finding beer bottles in trash along with condom wrappers but once I raised the price along with great ratings, I got working professionals and conventioneers which are never home because they were here to work.

Most people I ask say to take the lower paying job because Ill be happier and I will eventually make more with raises etc, but if I don’t plan on staying in the corporate world I feel that the extra 20k a year will help towards investing and retiring quicker.

Lower the purchase price?

I have a credit score over 700 and 100% equity, but lower income on tax statements (due to being self employed).