Your income is treated as active income and taxed at ordinary rates instead of the passive income we are used to with LTRs, but there might be more deductions you can find as well.After all that, if you know you want to do STRs in the long run, now might be the best time to make the jump.

It depends how many units, but 2-4 unit properties I'd say are $400 - $600/unit per year.I've done duplexes that are $1,800/yr and that's not out of the ordinary for a $300k property.

The repair doesn't get made.My lease is clear that tenants must give the vendor access during ordinary business hours.

If we are classified as dealers under the tax code, it seems any profit a partner takes home would be taxed at their ordinary income rate vs. capital gains tax if we were considered investors?

Capex is separate from ordinary maintenance.There are also considerations when buying an occupied rental.

But if you have done cost segregation studies and have 1245 / ordinary recapture to deal with, all of that income is taxed in the year of the sale, regardless of what you received for proceeds.Not previously as big of an issue, but in this world that we have had the last few years of 100% bonus depreciation, it is rearing its head more and more often.

Active Income: Profits from fix & flips are considered active income, subject to ordinary income tax rates, unless structured through a business entity.4.

Here’s a summary based on the responses:Tax Rates and Holding Period:For flips (properties bought, rehabbed, and sold quickly), profits are taxed as ordinary income, not capital gains.The holding period is calculated from the purchase date to the sale date.1031 Exchange:1031 exchanges apply only to properties held for investment, not quick flips.If intending to use a 1031 exchange, I must reinvest the proceeds into a like-kind property within 180 days.Holding a property for less than a year may disqualify it from 1031 eligibility due to lack of demonstrated investment intent.Thanks again for all the helpful advice!

If you convert your shares to a promissory note that may trigger depreciation recapture at ordinary income.  

Ordinary Income: Profits from flips are typically considered ordinary income, not capital gains.2.