I know if you "materially participate" in managing the short-term rental, you can use passive losses against active income for that property, but what about other long-term rentals?

I did all the work myself $1,200 in materials (I also re-wired the entire home & outbuildings, that minor I took in Elect Eng paid off).

How do you store all the installation materials that come with everything you buy for your properties?

i agree with you, I would remove them before cement boarding.it would give you a chance to see the real condition of the existing sub-floor for one, and it would raise the new floor slighter higher than it would need to be if the old material was left there.  

The difference in cost between the two materials is $1,200. thanks.

I think 40% is acceptable, if you're concerned, you can always ask to pay for materials instead. 

You rehab a property with a (hopefully) honest contractor from OOS who will make a considerable markup.The TK uses their own crews and doesn't waste any materials...leftover paint, carpet, etc is going to the next job.Who's getting the better price?

Had the property manager renovate the two bathrooms by almost gutting them and renovating with modern styles and materials.

As in buying the materials needed and putting in some sweat equity.

Maybe they are just trying to pocket money for themselves selling “course training” material.