We also include incidentals like accounting fees,  and legal fees (our properties are owned in LLCs), but those might not be expenses that you need to incur with your first property. 

The IRS also says it will provide more details and additional legal guidance over the next few months.

I've recently combed through all the Zoning Board of Appeals documentation for the last couple of years (and I had done the same back in 2014) and in almost all cases the board denies requests to re-establish rights. 

Rent the downstairs new addition (can be 2 bedroom) out for more, since it's bigger and no longer in the basement and is fully legal as a secondary unit (~$2200, 800sf)What would you do?

The engineer report will legally protect you. 

I use google drive, google sheets for accounting, and an amazing app called cam scanner to collect receipts and scan other documents that I can upload into google drive.

Am I exposed to any legal liability currently? 

I looked into legalizing it.

This is just my opinion, you may want to seek legal advise before signing any contract.

I know legal* advise should come from my attorney but eager to hear your thoughts please, also need to vent a little bit...