It is a non-cash loss!

We got the property under contract 4/14 (the day after it was listed), and were set to close 5/14.We were really excited that our mortgage company told me the asking price is under the FHA limit for a triplex. 

This includes the vast majority of residential landlords who own their rental property as sole proprietors (who individually own their properties), limited liability companies (LLCs), and partnerships.

She had one "unpaid balance recorded as a loss" in 2014.

The months for building are limited.

You can use the standard rental income form or I believe IRS prefers it to be taken as self-employment income (schedule e / schedule c) which if is a loss, can be deducted off your regular income, however if positive may incur paying more.

I have two questions.1)  How do I maintain limited liability on rentals if they are in my personal name?  

It may limit you on you choices of where of the type of place you want to live depending on the market.Sfh and townhomes also give you a great opportunity to learn to be a landlord without having tenants knocking on you door.

This loss will help the Smith’s shelter $5,716 of other income.

If you had nothing to do with it then the punishment (if any) will likely be limited to the PM.