@Michael Healy , The Form 8949 is for the sale or disposition of the Capital Asset.

When you're married, your interests are more likely to aligned as to what disposition the disposition of your property would be in the event of something happening, at least presumably so anyhow.Best of luck!

My hope is that 2% may be rational, have equity in the house, but unfortunately have extenuating circumstances that require a fast disposition.

At disposition or yearly?

If you take someones money and effectively control its disposition and you are selling them on an investment you are quite possibly a syndicator whether you like it or not.   

Syndicators evaluate markets and submarkets, locate the properties, perform due dilligence, negotiate prices, pay the attorneys, line up and qualify for the debt, interview and hire property managers, supervise staff,  manage the asset, work with CPA's to issue K1s, and when its time to sell they manage the entire sales and disposition process. 

Business Item Project % Execution of Business Plan/Idea 10.0% Site Acquisition and Purchase agreement 10.0% Entitlements (inc costs) 10.0% Capital Raising, Financing 10.0% Reputation 5.0% Loan Guaranty 25.0% Construction Management 10.0% Lease Up, Property Management, 10.0% Monthly Reporting/Meeting Disposition 10.0%

You put it under contract, then raise capital and obtain the loan, then close, then go in with property management co, renovate, operate, and then disposition?

That would tell me everything I needed to know, and there isn't anything opposing counsel could do to prevent it if I win on dispositive motions.

@Dan Earl if you email me, I'll share a copy of my move-out instructions and a description of the definition of "ordinary" wear-and-tear.You have a lot more going on here and would be wise to study up on how to document the condition of the home prior to occupancy, how to inspect, how to educate the tenant before moving out, inspecting after vacancy, documenting condition, cleaning/repairs, and deposit disposition.