@James MasottiAs ordinary income.

It was a 15 month flip, ordinary income.

Then, they wanted $20,000 to furnish and install 24 hour serveilance cameras and special locks and build two separate patios in the back with barbeques etc.They would decide on the inside paint etc. that they thought would be best.

@Tim Moore If you are flipping, you will have to pay ordinary income tax if the property isn't held for 1 year and 1 day or more.

Hi,For a rehab in Clearwater, FL I need an 8 ft. patio door.

Flip income isn't subject to capital gains, it's taxed at ordinary income rates.

., the losses produced by deprecaition on rental property) to offset ordinary income.

Investment income is defined as income from interest, dividends, annuities, royalties and rents, and net gain from disposition of property, other than such income derived in the ordinary course of a trade or business (however, income from passive activities and from a trade or business of trading in financial instruments or commodities is included in the definition of net investment income).This provision applies to tax years beginning after Dec. 31, 2012."

Assuming your numbers are correct, and assuming there are no out-of-the-ordinary circumstances (like exorbitant property taxes), it sounds like a fantastic deal...

There are so many limitations on offsetting ordinary income with passive losses that its useless to me.