I have a tax question regarding how to report my rental income when my tenant made and paid for improvements and I am reimbursing them by lowering their monthly rent. 

It's 2.5 years old with a tax abatement that ends on 12/31/26.

Can anybody advise me on how to treat this for tax purposes? 

And is it better for a wholesaler to buy/sell a home under a tax foreclosure or a mortgage foreclosure?

Legitimate hard money lenders and private lenders may not ask for business taxes, bank statements, or other documentation but they will ask for much more money down, their terms are usually 12 to 24 months loans, and higher interest rates.

I'am considering these states as property tax and tax are low in the states and my husband did his graduation from Arizona and Nevada is closer to where i live and North Carolina is in my mind without any specific reason:) . 

It is also very big and requires constant reno/repairs.My tax returns are laugh worthy to conventional lenders and I have 2 other properties so my debt to income ratio looks ridiculous to the average underwriter... but the cash flow is definitely there. 

I also pulled the trigger on 1 pasco tax deed sale.

Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes.

I get the $25,000 to $50,000 Option fee for my pocket, and I can buy another property, plus I get about $8,700 a year in cash flow and the principal pay down and the equity capture and the tax write offs.