With diets little food choices, habits that we make can have a huge impact on overall health.

REPS only changes whether the resulting loss is deductible, not the schedule.

If the property is profitable on paper, it can offset the mortgage payment or even contribute positive income.BUT, if the property shows a loss (after depreciation, vacancy, expenses), it could negatively affect your DTI.Some lenders add back depreciation, but still, a paper loss can reduce borrowing power.One more question if you don't mind - if we are not taking any money out of the LLC during the first year, will it show up on my personal tax return?  

Currently, I have this following DP3 policy that will be the renewal:SECTION I – PROPERTY COVERAGES LIMIT OF LIABILITY PREMIUMCoverage A – Dwelling $265,400Coverage B – Other Structures $5,308 IncludedCoverage C – Personal Property $5,000 IncludedCoverage D – Fair Rental Value* $26,540 IncludedCoverage E – Additional Living Expense*:*Coverage D and E combined, limited to 10% of Coverage A for the same loss (see policy).SECTION I – DEDUCTIBLES:In case of a property loss, we only cover that part of the loss over the deductible(s) stated:All Other Perils other than Hurricane Deductible:HURRICANE DEDUCTIBLE: 2% of Coverage A Sinkhole Deductible: Not Included$2,500$5,308SECTION II– LIABILITY COVERAGESCoverage L – Personal LiabilityCoverage M– Medical Payments to Others$100,000 $0.00$2,000 Included☺️ If anyone has any ideas on this I would appreciate some conversation.

Passive losses can only offset passive income—they don’t reduce your W-2 income in most cases.So while your duplex rental may generate losses on paper, they won’t reduce the amount of tax withheld from your W-2 unless:You qualify as a real estate professional, orYou materially participate in a short-term rental under 7-day average stays, orYou have other passive income to offset.What to do instead:Don’t stop your W-2 withholding entirely unless you’ve worked with a CPA to confirm a significantly reduced tax liability.If your rental qualifies under STR or REPS, then yes—depreciation and losses can offset W-2 income, and you might reduce withholding.Otherwise, you can still update your W-4 to fine-tune your withholdings slightly if you tend to overpay and get large refunds, but be conservative.Run a midyear tax projection with a real estate CPA who understands REPS, STR, and passive loss rules.

Loss of Use / Loss of Rents: Normally, there is a 20% included limit.

Have you considered cutting losses?

Making millions a year and often paying $0 in taxes.Short Term Rentals supercharge this:RE pros use cost segregation and bonus depreciation combined with leverage to create massive losses with minimal cash.Combined with 1031s and snowballing, you create a business that never pays tax.

In your friend's situation, the loss would not be the amount he has spent improving the property, but the value of the property as improved by the partial construction. 

LLCs allow flexibility in allocating profits, losses, and decision-making.Tax Benefits: As a partner/member in the LLC, your significant other will share in the tax benefits like depreciation, cost segregation allocations, and business deductions.