Depending on the situation, a taxpayer could offset some of the passive losses with active income.

This is due to bonus depreciation which allows taxpayers to deduct 40% of qualifying property costs in the first year, in addition to regular depreciation for new construction and improvement.

This is most of the depreciation you are taking year one.You can calculate your depreciation recapture by taking the sale price of the asset and subtracting the adjusted cost basis.The adjusted cost basis is what you paid for the asset plus any improvements you made along the way minus the depreciation you took along the way.The profit above this original cost is taxed as a capital gain, but the part linked to depreciation is taxed at a maximum rate of 25% under the unrecaptured gains of section 1250.To recap the tax rates are:- Sec. 1250 real property: 25%- Sec. 1245 property and 15 year 1250 property: Ordinary Tax RatesThere are ways to minimize depreciation recapture especially if you know how to work smart with your CPA.1) Asset Valuation at Time of Sale - Sellers can minimize recapture by reallocating the price of the assets on sale.

I could perhaps use Section 179 for the solar overall, as solar would be necessary, although not ordinary to conduct R & D. 

What this stems from is that the IRS requires that a taxpayer trace interest expense to the nature of how the proceeds are used. 

However, there is no way to do so without risk.The Internal Revenue Services issues three (3) Private Letter Rulings (PLRs) that allowed the taxpayers to do just this.

If/when a taxpayer's agent (which is what Apartments.com is) receives funds, that is considered to be constructive receipt to the taxpayer. 

It is in fact taxed at much higher rate as ordinary income. 3.

@Tom Rairdon If you’ve owned your short-term rental (STR) for over a year, it likely qualifies for long-term capital gains (LTCG) treatment, taxed at lower rates (0%-20%) compared to your 33% ordinary income bracket.

You are allowed to charge for ALL damages beyond ordinary wear-and-tear.