Most beginners after their first year worry about how to deduct all their losses instead of how to reduce taxes on their (non-existent) profits. 

My comment is that the problem is likely everywhere in the pipes, its just the main line is causing the most pressure loss. 

With our values increasing so rapidly over the past year (in particular), anyone who purchased 12 months ago has seen amazing returns on both rents and overall value of their properties.The main thing to watch out for in Seattle is the rental rules and regulations within city limits.

If you're in a residential zone, there will be limitations that you need to deal with.

But I recommend you consider what kins of returns you may be missing out on by not cutting your losses and putting your cash elsewhere.

The sky is the limit.

Buildable space is limited (low supply & high demand = $$)con: traffic up there is misery.

I just got the report from MLS.Naturally being just one man show and limited cash for the bigger houses, I have to be cautious now.  

The nuisance and abatement officer is involved, but they have limited resources and he is pretty much a one man show in handling these issues.

To answer Brian's question, I believe you just want to cut your losses and recover some of your cash and possibly pay back borrowed money.Assuming my hunch is correct, you just claim your losses, and there is no tax issue.If you do have a taxable gain after selling this property, you will not have adverse tax consequences, either.