Here's a breakdown:Taxable Income Calculation:The portion of your rental income that surpasses the combined sum of depreciation and deductions contributes to your taxable income.Tax on Excess Rental Income:The excess rental income is subject to your regular income tax rates.

The worst that’s ever happened is getting stuck with an excessive water bill.

Now, let's tackle it like a pro: Identify the moisture source causing the mold, fix it to prevent a comeback.

The excess production gets placed on the grid, benefiting your utility (basically you become a free energy producer for them).

The mitigation company hired by my insurance came out yesterday and said there’s a lot of moisture and the floor, cabinets and walls need to be opened up and dried.

I have a finished basement in one property which has occasional moisture. 

You are required to calculate depreciation.If your net rental income is negative and your income is above $150,000 and the property is classified as passive, the excess loss will be carried forward to the following tax year.

While sealant can give extra water protection, it might also trap moisture, leading to potential issues like mold.

Are there any other solutions to removing the exemption without being forced into excessive development of the ground?

If you can throw some of the excess income from the high season months at paying down your balances and lowering your credit usage you will very likely raise your credit score.  3) With a higher credit score and lower balance you could probably consolidate the credit card debt into a lower interest personal loan.  4) You need to analyze your listing and your pricing to make sure that you get more off season bookings.