Taxation of Loss on Flip House by an LLC

[Thomas L.]

I'm try to understand the tax treatment of a loss on a flip residence, but haven't mastered
how to search BP for this particular issue yet. I'm a newbie at posting a question, so apologies
if it is not in the correct topic area.

Situation - An new LLC was formed with several equal members.
The LLC purchased a house to rehab, then re-sell it.
The rehab costs far exceeded expectations, and the property will be sold at a loss.
This is the only property ever held by the LLC, and given the wonderful results, the
members will be dissolving that LLC with no further activity.

Given that the LLC's only property was purchased for flipping, is the LLC a "dealer", or does that even matter ?

Does the loss upon the sale of the house flow thru to each LLC member as an ordinary loss or capital loss ?

Does the level of participation of each member ( active vs passive ) make any difference on the type
of loss shown on each member's individual return ?

Thanks for your thoughts.