So after this years summer I decided to turn it to a ordinary rental.

Interest from loan payments are ordinary income (confirm with your tax professional)I recommend you use your LLC, but you would make a capital contribution to your LLC, the LLC would lend the money and the interest income would pass through to your tax return since LLC is a pass through entity and you pay ordinary income.

I would be happy getting $55k profit for Midwest fix and flip (before ordinary income tax).

I loved the idea of living there during the tourist season (similar to the Brits) and renting out a room or two and enjoying the place as if you were in vacation. 

If the suspended losses are in excess of the total gain, the remaining suspended losses will then offset ordinary income.3.

S-Corps are best for businesses that generates ordinary income.Wholesaling generates ordinary income.

Real estate lets you pay less taxes on both your passive income and ordinary income which can be a significant advantage, especially for those with a net worth under $5 million.

She suggested separating the two, creating another s-corp. 2) Last year she put the properties that I purchased on form 4797 under ordinary gains and losses.

However, when bought a rental last year and I suggested this to my property management company they acted like it was out of the ordinary to ask someone to sign a year lease.

However, there is some accounting overhead/charges required with a S Corp so unless you are really making a profit, its not necessarilyworth it.The issue with flips is the irs considers it earned income subject to self employment taxes and taxed at your ordinary marginal rate.