Based on only the facts and circumstances listed above and if it meets the 2 out of 5 year test, it will be considered under the $250,000 income threshold and non-taxable.

I set aside almost $96K in federal and local taxes, and I needed have to do another complete rehab if I kept the property.My conclusion, at some point, it's worth it to sell.

If the free rent were considered a gift or was taxable that could be a complication.2.

My husband wants to keep his Nevada state residency to file income tax there (NV doesn't have state income tax) but we would like to file jointly for federal income taxes.On the Utah State tax website it says: "A married couple who files a joint federal return may file separate Utah returns ONLY IF:one spouse is a full-year Utah resident, ANDthe other spouse is a full-year nonresident."

If you do opt for a HELOC, I'd consider starting with LA Federal Credit Union and getting a few quotes from other local lenders.

The property taxes are being reassessed yearly and probably you will only get the new taxable value 12 to 18 months after the purchase. 

I am strictly looking at my federal return, nothing to do with state.

A crucial point for property managers to understand: If you release the credit report to the landlord, or any other party, you just became a Credit Reporting Agency under the Fair Credit Reporting Act (federal law). 

We deal in low income properties, so our criteria is that rent cannot be more than 50% of income, but if the income source is non-taxable we increase it to 59%. 

Treasury that would allow federally chartered banks to move onto their turf."