Actual use, past and current business model an practice, correspondence with your professionals, nature and source of the sale, all can be used to demonstrate your intent.If you want to mitigate the pain of having to pay ordinary income + self employment on your flips you could adopt a slower model where you buy rehab rent refi re-evaluate your intent and finally 1031 (someone help me with an acronym for 1031 that begins with "r").  

@David M.@Andy

If you are contemplating selling it, take the hit on capital gains but then offset those gains with something else - you would do that if you can show corresponding loss (passive or active depending on whether you qualify as REP).

The ability to document your exchange could be all kinds of things - current and past practice, stated business model, actual length of hold, actual income production from productive use, correspondance with professionals and colleagues etc.Here's your statement.  

Listen to correspondence from defendant if any.

What I am doing is studying J Scott's The Book on Estimating Rehab Costs, and also watching videos from This Old House that correspond to what I am reading.

I would rely on any written correspondence from the city stating it is fine to proceed.

Always correspond via email so there is written record to bring suit in the event of misrepresentation.Remember, these are middlemen trying to play RE agent without a license.

That’s why you don’t send rent increases by mail.......you never send ANY correspondence much less a rent increase to a tenant regular mail.

I don't know if you're downtown or north KCMO, but the what they call the downtown area is going to have less demand and corresponding rent values.Meet with some managers and get their perspective on what they would rent the property for.