I recognize this is not answering your question but with a single unit, I believe if you declare real estate professional it will invite scrutiny.  

Although, I completed several gut renovations including garage conversions, in the past, I recognize that this is a different beast.

I recognize if you compare this rate to F/F prior to q2 2022 it looks terrible. 

You will recognize it because you will know relative value.  

Just recognize your risk assessment.  

I recognize that commercial real estate is struggling, with ~30% vacancy in downtown Portland and homelessness issues, but I believe this property’s tenant stability and quality make it a lower-risk option. 

At that class of property, the delinquencies are not low and have to be properly accounted for.The reason I asked how long you have owned is that it takes a while to recognize the sustained expenses.Obvious is to get rid of the poor tenant. 

Only at that point can an underwriter recognize it as an income producing property. that's for some lender ; for other lender they can use appraisal opinion.to reduce dti from primary you could also attach lease agreement and proof of income.

You would still need to recognize your half of the gain on the sale.

Hi Sandra, as soon as you can estimate the amount of gain you will recognize from the flip you should pay an estimated tax on that amount.