., what would normally be used to offset against future passive income which is taxed at 20% can now be used to offset against ordinary income, which is potentially taxed at a much higher rate. 

Example: - Example: $50K gain after transaction expenses are paid ($25K Recapture and $25K capital gain) - Disposed Property: Net sold value of $300K (after transaction expenses)- Originally Purchased for $275K- Depreciated book value of $250K - Acquired Property: Purchase price of $200K - What would the estimated tax liability be on this transaction assuming an ordinary income tax rate of 25% and capital gains tax rate of 15% if using a 1031 Exchange?

Accounts I work with personally tend to say anything that is "necessary," and "ordinary," in the course of business can be characterized as a deduction.

They are not depending on some ordinary residential agent to get that stuff done.Secondly, you're probably not at the 60-100 offer level.

This is especially true for anything to requires variances, rezoning, or something out of the ordinary for the city.Projects often do go over budget.  

The profits will be taxed as ordinary income, subject to your ordinary tax rates.

Ordinary vs Long Term sounds snafu'd - - get a CPA, not just some accountant nor bookkeeper. 

Learn about ROI, invested capital, interest rates, entrepreneurship, capital gains taxes, passive income (tax) vs. ordinary income (tax), direct marketing, contract law (crucial!)

You will have to hit a grand slam in order to make up for the early withdrawal penalty, ordinary income tax hit and loss of expected investment income. 

I'm a Brit, living in NYC who currently owns 5 investment properties between the UK and Brooklyn.