Leverage REP status to use other losses against capital gains in the liquid assets of the company (invested in EFT's, etc)The policy for loss distribution would be:-All must be active (preferably material) participants to get deductions; hence the 20 or fewer so relationships can be maintained-Non-REP's can take up to $25k/y as PAL.

would you judge if a person is overleveraged by their income their bringing in and/or how much liquid assets they have in banks, mutual funds, etc.?

Take notice....One of my favorite sayings came from a favorite Civil War General - "never take counsel of your fears" ...John Jackson

Could be...you won't know until you ask around.Try knocking on some doors and introducing yourself and your intentions...get e feel for the neighbors/neighborhood and the dog situation.

Jason E.

Just know it's 75% of the gross rents OR a 1 or 2 year average of your Schedule E (rental income in your tax returns) after accounting for 75% of gross rents.

4. this is where BP's favorite calculation, Cash on Cash flaws woefully short.

@Eric MillerThe IRS does not care about the loan product that you have.The IRS just wants you to properly classify mortgage interest as a Personal Residence mortgage interest (Schedule A) vs Rental Property Mortgage interest(Schedule E).Best of luck! 

My personal favorite is "Every Landlord's Legal Guide" by NOLO because it includes a lot of practical advice but it also has your state-specific laws.

Hi, I have a duplex rental for 4 years but I have never set up an LLC, so I claim that as passive income on the schedule E.