To qualify for active status on short-term rentals for tax purposes , you need to meet the IRS’s material participation requirements.

You're dealing with two parts of the IRS code.1.

Depending on those estimates, the buyer can determine if it worth pursuing (I suspect it will be worth pursuing).Good luck

I don’t know how hard th IRS would frown on it but I’m sure it’s done all the time out in farm country. 

When doing a fix and flip loan, the appraisal will determine the current as is value as well as the ARV. 

So, comps can help with figuring out local cap rates, then you need the income from the property to determine a value.

Financing might be a challenge.I would recommend consulting with a attorney, loan officer, and CPA to discuss your specific situation and determine the best course of action. 

However, proving material participation with a full-time job can be challenging, especially if tasks are outsourced, as the IRS scrutinizes such claims.

If any of the proceeds touch the sellers hand the IRS sees it as taking profit and you will have to pay taxes on that portion.Net proceeds - Is the net sale, minus any Equity in home being sold.I find a lot of investors who want to purchase less than their reinvestment requirements will do the calculation to see what their tax burden would be if they purchase less than they sell.

That's why we require clients to spend a couple days with us in Milwaukee up front, so we can get on the same page and determine an asset quality.Hint: the hood looks much better on a spreadsheet than up close in person.