True flipping is a business activity so it's not taxed at capital gain rates, but at ordinary rates.

Typically you can only use it to offset your passive income and not your ordinary income.

It's crazy that something that is ALWAYS treated as active income subject to self employment taxes and ordinary income tax rates can be treated as a passive investment inside of a retirement account. 

I would then carry the income down onto box 1 of the k-1 as ordinary income versus box 2. 

Result is I claimed 15,000 depreciation which when I sell, i have to pay tax at ordinary income tax rate.If i do not claim "active participation", then the 25,000 will be carried forward as "suspended loss", and if i sell my property next year, the 15,000 depreciation that was not used can work to reduce my depreciation recapture income / tax.

On a flip you are subject to ordinary income rates instead of capital gain rates.

Send a letter that you have paid in full the agreed amount, any “changes” gc wants additional money for were to address non-workmanlike results that were expected and ordinary, but that you are willing to pay $20 for the base trim at Home Depot prices (maybe add $30-50 trip charge for worker to go buy) as an offer in compromise or good faith.

Do you deduct the "common/shared" expenses at the LLC level on the Schedule K-1 as "Ordinary business income (loss)"?

Hey @Cole Britting, good for you for making the best of a tough situation.  

Originally posted by @Brit F.