My question is, what is the best way to describe this scenario for tax purposes.  

No, your nobody special and do not garner any "relationship building" or any of that jazz UNTIL or unless you make yourself special to them to garner a volume relationship. 

And there are real estate text books, many used in business schools, as well as building trade books, magazines, youtube videos.

.🔹 Ideal in Any Market – Whether home prices are rising or falling, lease options allow you to lock in today’s price while benefiting from future appreciation.Other creative strategies—like seller financing, subject-to deals, and the BRRRR method—can also open doors, but lease options remain one of the most powerful, low-risk, minimal cash out-of-pocket ways to build a portfolio.

It is tax free in the sense that you will not owe taxes today on the cash-out.

Your total project cost is only ~ $143k. 3c) Your interest rate is probably going to be in the low to mid 7s, at least4) All states/areas are different, but I usually see with my CFO clients that their property taxes are higher than their insurance, with taxes often 1.5x higher than insurance.5) Lastly, I saw PM fee of 8%, are you paying someone else to manage this?

Hello Derick, If you have not already done this, I suggest the Build Your Investing Team> menu/link at the top left of the page on Bigger Pockets and go through the process of building a team.

Much of the negotiations during due dilligence depend on demand for that specific property- hopefully your agent has build leverage in to your contract that they can use to help you with this piece. 

Some are owned by my ROTH IRA and are making tax free cashflow.

Assuming your debt is SUPER cheap and only costs you 12% you’ll save $22,800 TAX FREE  So the combination is saving $60k at 12% (or more) is $7,200/yr and $130k in the bank at only 4.5% is another $5,850/yr  so you’re over $13k GUARANTEED instead of a chance to make $7,200 before taxes