Dave, rental income will continue to be exempt from self employment tax

@Alain Perez-MajulThe IRS rules state that when a tax-exempt entity (like an IRA) engages in a trade or business on a regular or repeated basis, then that entity is determined to be competing with tax-paying businesses and therefore subject to UBIT taxation.The reason you see such a variety of opinions on the topic are twofold.  

ThanksMy CPA made it clear, the only ones exempt are corporations = S-corp and C-corp.   

Your municipality may have a limit on the amount of unrelated people that can live together and require a special exemption from zoning.

There are exceptions though, proposed under section 1946.2 which may exempt SFR owners.What isn't clear to me is the distinction between eviction for just cause and just ending the tenancy for no reason.

As far as I know if I apply for homestead exemption it won't be effective until the year after. 

The previous owner had a homestead exemption and 65+. 

Just spoke with PenFed about applying for a heloc (to use to fund an investment property) they said helocs in Texas can only be taken out of properties with a homestead exemption.

Also does a 1031 exchange exempt you from paying recapture on depreciation?

The difference between AGI and taxable income is personal exemption(s) and Itemized or standard deduction.As Jon indicated; taxable rental income is not calculated as gross rental income less PITI and expenses.You have to add back principal and minus depreciation.How much is the principal?