I can calculate capital gains in a vacuum assuming $0 of ordinary income, but layering on income gets very tricky.Bonus points if anyone has a spreadsheet for calculating capital gains tax with income that ALSO includes the net investment income tax . . .

############In the letter, I am not promising free rent, discounted rent, or anything out of the ordinary.

I suspect this will be taxed as ordinary income and you are already in a higher marginal bracket. 

First, simply holding on to the property for more than a year with it in productive use will turn the ordinary income gain into a capital gain with a more favorable tax rate.  

Typically taxed at ordinary income levels whether you use an LLC or not.

Ordinary income tax plus self-employment taxes.

In addition to a taxpayer's wages, salaries, tips, and other compensation, active business income includes the taxpayer's share of (1) ordinary proprietorship, partnership, or S corporation net income (or loss); (2) Section 1231 gains (or losses) from a trade or business; (3) Section 1245 and 1250 depreciation recapture from a trade or business; and (4) interest earned from working capital related to a trade or business2) You can also take bonus depreciation (50% depreciation the first year).

Of course, consult a qualified professional.Of course, the interest payments on the loan would be taxed as ordinary income. 

If you mean pay taxes on the income from the flip, then yes it would be taxed federally as ordinary income.

If the deductions are greater than income amounts and nonpassive, then I can see them offsetting ordinary income.All rental activities are per se passive.