@Marina Wongmoving your SDIRA into Solo 401k would be beneficial for several reasons, but the tax impact on distributions would be the same: you have to pay ordinary income tax on distribution regardless if you pull it out from an IRA or 401k. 

Last year, I had told by several syndicator that I invest to their deal and will receive negative K1 then use those negative K1 to offset my ordinary Income include my commission from 1099 because I am qualify as real estate professional.

After that, tenants take responsibility for "ordinary" pest control (things like mice, ants, flies, or cockroaches). 

I think he's referring to it as treating the income as capital gains instead of ordinary income.

A common way to build a portfolio quickly is to use creative, out of the ordinary, purchasing techniques.

I never caught anything out of the ordinary.

Generally, you probably will still qualify for some tax breaks against the rental income itself, but perhaps he/she meant that you may not be able to use any real estate losses to offset your ordinary wages, interest, dividends, etc? 

According to @Jay Hinrichs, the back yard might be a separate S corporation as developer for ordinary taxable gains and the front part a 1031 exchange for capital gains. 

Considering adding a hot tub to my Poconos short-term rental property and wanted to get your thoughts on a few things:1.Patio vs. basement installation for the hot tub?

In this scenario, you're subject to ordinary income tax.