"I now have legal expenses too". You need to see a CPA. Since this is a commercial property, I'm not willing to delve into this anymore, as my years of experience is only with residential rentals. I wouldn't be sure if you'd deduct your legal expenses as a personal one under the Deductions & Credits tab where there's a spot specifically for legal expenses, or on the rental side. But if I were to guess based on my experience, I would think you could deduct your legal expenses that were incurred and actually paid in 2016, on the 2016 return.
If I'm right (I think I am, but won't state so with any authoritive knowledge for your specific situation since I'm not privy to all the details as you are) then you'll claim your legal expenses under Deductions & Credits tab in the Other Deductions & Credits section. Under that is a sub-section labeled "Legal Fees". I'm expecting you can claim those legal fees there, since technically (and legally) you can't claim them on SCH E since you won't be filing a SCH E for 2016. (The fact you won't be filing SCH E on this property for 2016, I *do* know for a fact.)
