This rule also applies to real property held for sale to customers in the ordinary course of a trade or business. 

Keep in mind, if you over estimate education expenses and have left over money in the plan, you will be pulling it out at a likely higher ordinary tax rate (because in 17 years you will be rich) and you'll be paying a penalty tax on it.You'll likely see higher returns with real estate, but it's also tougher to manage than a 529.

In general, you cannot use a passive loss to offset ordinary income. 

Pick a turnkey company in the Midwest where everything is ordinary and the cash flow return and appreciation is more consistent.

Neither our contractor, nor my husband and I when we visited once a year, ever realized they had painted the walls gold, had installed a kitchen backsplash, had basically destroyed the carpeting (covered by a lot of heavy furniture), spray painted the patio, stained the kitchen cabinets, replaced a light fixture, and apparently never cleaned the kitchen, nearly ruining all the new appliances. 

So im ready to take on my first property. i've formed a partnership with my best friend who is an agent which is very beneficial , i manage a hardware store  which will be extremly helpful when it comes to buying material aswell as networking with other investors and contractors. so heres the deal we are looking at single family twin  ( reo) asking price is 62,500  going to offer 40,000  hopeing that works . house is going to need a kitchen (12,000) bathroom (6,000) going to change the radiator heating system to hvac (approx 4000)  finish the basement (7,000) siding (6500) new oak hardwood floors (2500) new doors interior and exterior (5000) and a concrete patio out back ( 1,500)  and other cosmetics (5,000) we figure all said and done we would end up about 90,000 into the house which the market in the area has them going  around 135,000 as a median and 165,00 high end 120,000 low . how does this sound to everyone any and all insight is greatly appreciated thank you in advance for your time and thoughts.

For the location, I was thinking about Buffalo Wild Wings (I spoke with the manager and he said they have an enclosed patio area that will hold up to 25 people) in Broken Arrow.

The room to the back of the kitchen is actually a 4-season enclosed patio that goes out to the deck in the backyard.

When selling business assets, the federal tax rate on gains can vary from 20% - raised from 15% (long-term capital gain) to 35% (ordinary income rates), and there is an additional 3.8% Medicare tax applicable to certain passive investors.

Wholesaling results in ordinary income, taxed as such.