Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.Unit 2 - Replaced water heater and rangeOther - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint What was the outcome?

Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.Unit 2 - Replaced water heater and rangeOther - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint What was the outcome?

Unit 1 - Painted throughout, installed new floors throughout the downstairs, replaced appliances, kitchen cabinets, the bathroom vanity, the majority of the light fixtures, and the old dirty light switches and outlets.Unit 2 - Replaced water heater and rangeOther - Repaired roof, added some foundation supports, and added curb appeal by painting the patios/doors, replacing porch lights, and putting new house numbers on top of the paint What was the outcome?

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

The previous owner did a garage conversion as well as closed in a back patio.

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. 

When we purchased the property, the tenants living here were paying $750, but our new tenant is paying $1,000, we are currently updating our side and plan to ask a little more than that due to our side being a little bit bigger with an additional room and patio doors to the backyard, where the other side does not have.

I'm going to be finishing up a set of patio chairs here soon.

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