My husband qualifies for our law school's low-income protection program (they pay 100% of his loans) while I'm in the federal Income-Based Repayment Program (and pay $0 a month). 

adding per publication 527- property is being used for personal use and is the main home of family member.i went thru an interactive tax assistant (IRS site) -Is my residential rental income taxable and/or are my expenses deductible?

If you do it right, you can invest in a tax-advantaged manner because the interest expense will reduce the taxable income on your Investments.

Transfer to the LLC is probably taxable.

Years back I mentioned to my Attorney at lunch that I wanted to start flipping & was going to get some money from some friends - he cut me off mid stream & told me that taking money from any more than 4 people made me subject to federal statutes and that I needed an investment license to do it... 

Regardless, Lenders also cannot deviate from HUD/FHA accounting policies regarding the disbursement of the 203k rehab funds, which are federally insured. 

If you have a mortgage backed by Fannie/Freddie/USDA/VA (which is a very large percentage of mortgages), or receive any other type of support from the federal government (Section VIII, etc), you'd actually be breaking Federal law by charging late fees or penalties. 

@Mitch Messer is right to an extent, but if you’re not willing to correct your tax returns and show taxable income, rather than write everything off, and you’re seeking a traditional loan, you are left with two options.

The Feds don't like messing around with fake representations regarding federally insured mortgages and properties.

I don't want to impact my borrowing power since I am looking forward to buy another property.Sure, all deductions you take will decrease your taxable income.