I ALWAYS tell the wholesaler to make sure they are transparent with the end buyer and their lender because MANY times if they aren't transparent about the double closing then the underwriter will catch it last minute and bring up the fact that the current deed holder isn't the wholesaler and that will kill the deal many time.There are some underwriters that don't catch it and things go smoothly.Then there are some conventional lenders that aren't familiar with the process and think it's fraud and won't lend on it.So sometimes I inform the wholesaler to let the end buyer go direct with the seller, do a single closing, Increase the purchase price by the amount of the wholesalers spread and put the fee on the SELLERS side of the HUD because the lender WILL NOT pay for the wholesalers fee, but if it's wrapped into the initial AB contract (now between the seller and end buyer) then the wholesalers spread isn't brought up, it's merely a line item on the SELLERS side HUD and nothing to do with the conventional lender and it will close "100%" of the time because it's a normal ordinary closing to that lender then.

Because you can leave more money inside the 1031 where it will stay tax deferred.and the 3rd option (just because I'm a Goldilocks guy) is to not take a commission (you don't pay ordinary income tax). 

However, by changing investment income to ordinary income, on would now owe social security and Medicare tax, at the combined rate of 15.3% (both sides), less deduction from income of one half of the tax, so effective rate of 12 - 13 %.  

My questions are: 1) Does a big fix for the retail market automatically put profits into the "ordinary income" flip category?  

Capital gains tax rates depend on your income level however, an IRA distribution and the depreciation recapture are treated as ORDINARY income. 

There is a special exception for a residential rental property operation with active participation that allows you to use net passive losses from your rental activity to offset your non-passive income (W2 income, or, ordinary income).  

"Unreasonable" is a legal term but as long as you can show they are not out of the ordinary, again, you will be fine.You can read the Texas Property Code relating to late fees here: http://www.statutes.legis.state.tx.us/Docs/PR/htm/...You can read the Texas Property Code relating to security deposits at the link below.  

It's ordinary income, added to your salty so you can look it up on a current taxes schedule, plus add 15.3% for the SS/med self employment.

Will the IRA be subject to self employment taxes (because this is a flip) or will it just be taxed as ordinary income? 

You can get them, but usually not from your neighborhood residential mortgage broker.For your second question: Loan-To-Value ratios cap out for ordinary loans around the 75% - 80% range.