I know once we consider commissions, closing fees and remodel costs, it should definitely bring the taxable amount down by quite a bit.The reason for moving back has to do with the constant slew of issues we experienced since buying the home (most of which has been resolved now, but mentally a lot of damage was done.)1.

@Nat Chan I am confused to why you did not have a legal right to enter the property using your key to the property.In some Leases, it states that a Landlord can enter without giving prior notice to repair items that might cause damage..IE water backing up, leaking or other issues that could cause damage.

After we tossed the garbage and ripped up the carpet and linoleum this is what we have: both bedrooms have water stained hardwood floors, bathroom and halway floor rotted, mold around bedroom windows, 6 of 8 windows are broken/damaged, duct work for HVAC is damaged.  

Does she have tenants insurance and does it cover that type of water damage?

I might agree to deduct the 11 days of rent plus any damages from her deposit and give the remaining portion of it back to her at moveout, provided she handed over the keys and left the unit clean.  

What if they leave damages? 

At this point it may be that she needs to manage her damage control.

And then there's the potential of malicious damage done out of spite. 

A plumber came out the other day to give a quote on the work in my rehab, and he said that there's only one insurer (that he knows of) that will insure against damage caused by PEX plumbing.

I currently rent out my house that I owned prior to our marriage.So #1 is kind of a crappy option because it will take my savings for my next rental property, plus I will have additional costs to repair the water damage.