Tax treatment of cheap house sale that was never rented.

[John Teachout]

We purchased a fixer up house a year or two ago that we decided we didn't want to fix. We bought it cheap and sold it cheap. The sales contract price is $10,000. We probably have $7,000-$8000 in it and essentially just used it to store construction materials in we use on our other properties.

So, this house was never "held out" for rent, is going to net such a small amount it wouldn't be worth doing a 1031 exchange and may not even be eligible for one. How is it treated from a tax standpoint? Capital gains? regular income? or???

Our profit after closing is likely going to be $2000 give or take a bit. I guess it would be like a flip but we didn't improve the property at all...

What say ye?