Personal days also include days on which you have donated use of the house -- say, to a charity auction -- or have rented it out for less than fair market value.3.

We wanted to buy this property for the cash flow, not a charity handout.My realtor advise me to think about the decision for a few days as we both want this sale to go smoothly as the seller has had cold feet before.We live out of state but go to the area about once a month to see family.What you do in this situation?

Are you running a business or a charity? 

https://www.irs.gov/irm/part7/irm_07-027-008.htmlAnother tax that applies if flipping is consistently done using IRA funds is unrelated business income (UBIT).https://www.irs.gov/charities-non-profits/unrelated-business-income-defined

I would also add removing old,broken,warn out,or enormous furniture that is clearly unattractive and makes the living room and bedrooms appear smaller and less comfortable than they really are.The house should be staged with modern and appropriate furniture to show buyers what they're new furniture will look like in their new home.Excess clothing that is not normally worn should removed from overstuffed closets and dressers and donated to charity,thrown away,or boxed up and stored off site from the home.If your toilets are old or have unremovable stains that look terrible,replace the entire toilet.Bathtubs should be reglazed to look shiny and new again.

Charities Housing Development Corp

I assume the owner knows about the property than me (you know...because they own it) and if they could get $600 in rent but are taking $400 it likely has more to do with the property that incompetence or an overly developed sense of charity.

But the Charity in essence becomes the benefactor of that tax. 

Make notice and start the eviction process; you can always stop it or choose not to go through with it, but start it asap.I always try to work with tenants who are in a hard spot, but work with them does not mean provide charity.

Should I find a creative incentive, like donating the gains to their favorite charity?