He will have strong rental cashflow and substantial equity gain from the forced appreciation as well as neighborhood growth and increased demand.

I have seen on this website answers both ways regarding this (the site administrator saying leave it in Sch A, and his colleague (also a enrolled agent) advising that it can be written off in Sch E, but that there are certain restrictions mainly -- you must have passive activity gains where the deductions are covered (no passive activity loss carry over allowed.

I'd appreciate any insight you gained on that piece of the puzzle.

What are the specifics regarding capital gains deductions that are state specific to Oklahoma?

Furthermore, we have also started using our home as an Air BNB rental and have found it to be great way to make passive income.  

I want to raise enough passive income to be able to retire from education 

They are gaining the trust of the homeowner by pretending to be an expert in their field and falsifying the info into their advantage so they can make money.  

I was thinking I was going to wait until 2018 to see what the actual loss or gain was from the insurance payout minus the repair costs and claim it then (Kind of like you would with a flip...claim all expenses in the year you sold it not in the year it was incurred).

Makes me feel a bit better about value-add strategies as a passive investor.Thanks

I would like him to be as passive as possible, while I control the whole asset.