The situation:
-Wrestling with my 2012 1040. Have filed for an extension.
-I'm not a real-estate professional or tax professional.
-Own two residential rental properties - #1, #2
-Both are rented at FMV rates to non-relatives.
-Purchased property #1 in 2005 as an investment to rent out.
-Property #2 was my home that was paid for and took out a mortgage on it to buy property #1.
-In 2007, moved to another state (where I'm renting a place to live) and converted property #2 to rental because I didn't want to give it up. Thought I might move back in some day.
-Property #1 has shown a profit on Schedule E for 6 years out of 8, including the first partial year (2005).
-Property #2 has been in the red on Schedule E for 4 years out of 6, thru 2012, including the first partial year (2007). Filed a Form 5213 in tax year 2010 to postpone a not-for-profit categorization. Not sure it does much. Loss is mainly because of interest on the mortgage I took out on #2 to purchase property #1.

The questions:
-Do I have to now start treating property #2 as not-for-profit on my 1040 for 2012 and report it in accordance with Pub 535, Chapter 1?
-How tolerant is the IRS about categorizing a property as not-for-profit? An accountant has said to me casually (i.e. not for a fee) that since I'm not a real estate professional, I don't need to change the status of property #2 and can continue reporting it as a Schedule E loss. Will the IRS call me on it if I do that?
-Could I (and the IRS) consider the two rentals as a "single activity" and avoid a not-for-profit categorization that way? The combined Schedule E net-net for the two properties has been in the red 3 years out of 8 but only 2 years of the past 6, including 2012. The properties were being reported in past years on two separate columns of the single Schedule E.

Thanks in advance.