Unless you meet one of the exceptions or exclusions discussed later, the amount of the debt that has been canceled is ordinary income and must be reported on the appropriate form as discussed earlier.Interest included in canceled debt.

Assuming the $40k Vanguard account is a 401k (subject to 10% penalty) you’ll blow $4k on penalty and 15% on the long-term gains, and whatever your ordinary tax rate is for the short-term gains.

Keep in mind Pace is not your ordinary guy and he's not a beginner, so he has the ability to create deals that you can't imagine and you won't possibly learn all his tricks from his book.

That is not correct...Flips are taxed as ordinary income, at your marginal tax rate, regardless of how long you hold the property. 

You also have a lot of empty wall space that could use some artwork, otherwise it just looks empty and cold.I would consider a covered patio in the back yard so guests can enjoy that space, with or without kids.

realize you are paying ordinary income tax rates on that money compared to dividend rates if invested, so take that into consideration and possibility the borrower does not refinance or you have to foreclose. 

Profits on stocks are classified as capital gains, which are taxed at a lower rate than ordinary income (such as wages).

I have a house in Henderson, NV.  The back sliding door won't lock.  It's very difficulty to open and close the door.  I'm sure there's a way to remove the door to fix the wheels on the bottom of the door but I don't ...

So, the profits are considered active, ordinary income subject which means its also subject to self employment tax. 

I do some small stuff, but I have some balconies and raised patios I am too scared to touch.