Property is in Upstate NY Is this replacement cost coverage with special form?

I've filled out the 1040 Schedule D Tax worksheet 3 times and each time have come back with it being taxed at the marginal rate of 32%, with no particular special treatment, based on the flow of that worksheet I don't see how it could be any other way.I have read many, many, many, many, many threads on this forum mentioning the recapture being taxed up to 25%.

The numbers look a little high for quotes on adding ADUs and I am working on finding a contractor that specializes in affordably converting two car garages. 

I realize there are better in investments, but we like Wildwood, NJ and would use it for 1 week during the summer and a weekend getaway during the off season.Current pricing appears to be $650-$850K for 3BR/2BA, 1,400 sq. ft. and ~$16K out of pocket costs ($5K yearly taxes, $10K condo fees covering wifi/cable, flood, sewer, trash, etc. and $600 for content insurance).

My husband @Rick Stout is a realtor/investor that primarily works with investors and specializes in air bnbs.

Personally, I would only purchase for STR right now on either very unique/special properties or on those that also work out as LTR.I am a licensed REALTOR who is investor focused.

It's been small local/regional banks and more specialized DSCR type loan providers.

This will give you a clear idea of your budget and make your offers more competitive.Work with an Agent: Consider finding a real estate agent who specializes in the areas you're interested in.

I'm a real estate agent that specializes in working with investors in a second-home market in the Northeast US.

We have began to target Listing Agents, in an attempt to find connections, but are wondering if there are specific agencies that specialize in this market that we should be targeting, to lessen the effort?