I understand taking deductions, but there is only so many ordinary expenses you can deduct.

Any interest paid to seller over the course of the loan, after closing, would be taxed as ordinary income.Happy Thanksgiving!

One thing I do not like about trust deed lending is you have to pay ordinary income taxes on the interest income if you use non retirement cash to invest.  

His explanation is that the profit will be taxed as ordinary income irrespective of the desire to use 1031...is this accurate?

Income from flipping is ordinary income, not short term cap gains.

If she takes out a distribution from her retirement account prior to normal retirement age the consequences would be ordinary income taxes plus penalties.

Don't flip, hold for a reasonable time and do a 1031 tax deferred exchangeIt is ordinary income.... so no real estate benefits other than cashTake the profits from your flip and invest that money into something that will compensate you for the loss in taxes you will have to reportDo more flips, pay your tax and enjoy your wealthHave fun, spend some of that money on yourself.....

Thanks Brit and Steve.

At the same time, you can have an entirely separate account that solely focuses on long term holdings and reap the benefit of a lower tax rate categorized as capital gains as opposed to ordinary income. 

- Repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred.- Travel (local and long distance) tax deduction whenever one drives anywhere for their rental or business activity.