I would also keep the fireplace functional.

And, ya, as a landlord this means you go-to lender might be willing to help you avoid the $25 credit pull fee you charge potential tenants if you wish (it'll be an auth form they sign instead of a $25 check they write).Something that's also a nice bonus with this: If you meet a lender that "can't" give you a quote or any information based on reading a credit report without actually pulling it, that means you've found a dummy that doesn't know how to function without his software, and thus can eliminate him from your pool of potential lenders right off the bat because she or he ALSO isn't going to be able to handle your "I own 5 investment properties, 3 are in an LLC" scenario (mortgage software mostly kind of sucks at these deals, and frequently needs to have the human override bat swung at it... which means you need to be able to do it with a pen/paper/calculator or you shouldn't be doing it at all).

@Joshua WomackCAP rates are a function of the assumed market value of a series of cash flows based on current economic factors.

Why shouldn't I prefer a tenant that has proven (to others) their ability to function effectively, and cope with the everyday needs of living in a valuable property.

Whoever prepares the tax return for the partnership also prepares the Schedule K-1.  

Here's the rub - Three years ago I made some impossible choices for the right reasons and am now curing my functionally obsolescent financial position.

While it could be distributed, it will come out as gain as well; (3) there is no "step up" in basis at the death of the shareholder, except as to the basis in the S corporation stock (which is not depreciable) - thus, the surviving spouse can re-set the basis and re-depreciate the property (or sell it and recognize no gain).Most investors I know either use trusts (a discussion of trusts is beyond the scope of your question), or LLC's taxed as partnerships when investing in depreciable property. 

It will function properly until you plug something in that must only go in one way, and could also require the neut at the neut location.

A functional, dug-in trampoline might also be an asset when trying to sell a home but this pit and frame were old and broken, and I think the firepit conversion added way more value for the average buyer. 

Class B buildings should generally not be functionally obsolete and should be well maintained.Class C.