@Andrew AngellIt’s taxed as ordinary income unless you are a c Corp and paying corporate tax rates firstNot a cpa but this is my experience (which is why it’s typically better returns long term to invest in a fund that can provide better returns and diversity)

‘flips’ profit is actually taxed as ordinary income, like a wage.

However, it's a bit out of the ordinary for them to correlate your Facebook friends with past renters (not great logic).

Makes me think though...is the tax I pay on flip income the same as my ordinary income as a real estate agent? 

Flipping is just earning more ordinary income.

So the tax would be at ordinary income rate.  

The seller is worried the IRS will count the difference between the sales price($80k) and the total loan amount($120k) as ordinary income (approx $40k) and is ready to walk from the deal.  

@Ty GlendenningWhy would you sell a house on owner financing if somebody would pay cash for it.While a lot of people think, seller financing is a great idea, the risk involved to collect the payments that then get taxed ordinary income are equivalent to investing it currently in a treasury bill, which has zero risk.

You can do private lending and get 10% and pay ordinary income taxes on it, or you can buy a property that has some equity but if your tenant is paying down your mortgage you are still building equity.

Deed executed between seller and Investor 1. 2) Investor 2 puts a 1K option on the house with Investor 1 at a purchase price of 75K. 3) Retail buyer comes along to buy house from Investor 1 at 110K with 25K down. 4) Investor 1 pays Investor 2 40K to NOT exercise the option, 25K immediately and the balance in payments over time. 5) This is investor 1's first flip and will be the only one this tax year.Other than the 1K option money which is ordinary income, what taxes will Investor 1 incur?