I had considered this a "capital gain" and thought it would flow through from my K-1 to personal tax return as such, and as a result, I consciously sold a significant amount of my "under-water" stocks at a loss to try to "offset" that gain, so as to lower my personal tax liability.My accountant has informed me that because it was "rental real estate", it is considered a 1231 sale, and as such, it is considered "ordinary income" and not a "capital gain", with the important implication of that being that I am not able to use my stock losses as an offset. 

If it's not a RM, ordinary short procedures apply.

Thanks Eric - in the UK (we are Brits so we know the market and how to do business out there pretty well)

Thanks for the advice Brit! 

You are better doing one thing very well than being ordinary in many areas.

If you think your property tax is rough trying seeing your marginal income (like rental cash-flow taxed at ordinary income rates) taxed at 10% to 13%.I'm not saying I'm in favor of massive property taxes, I'm not.  

And cash-flow from real estate is taxed as ordinary income so anything I get, well, I pay ~45% to the government.

You might have a loss that will offset some of your ordinary income including W- 2 income.So, yes IRS will tax you on the rental activity. 

I'm in Tennessee so can't speak on the specifics on some of the standard closing costs in New Jersey, but nothing looks too out of the ordinary.

@Paul Schu I think if it shows up as ordinary dividends (vs qualified dividend), then it would be tax at tour tax bracket