"Gains or losses from the sale, exchange, or other disposition of property" are not UBTI if not from "property held primarily for sale to customers in the ordinary course of the trade or business."

What I mean by "bad employee" is that I fight within myself to be ordinary.

Just cap gains, And tax on depreciation you claimed while owning them at ordinary tax rates (25% max cap).The two year (perhaps soon to be 5) thingy is only for your primary residence.

So please keep that in mind when forming the entity.If you guys decide to do a buy and hold strategy - some type of partnership vehicle will work(GP, LP, LLC with a lot of people opting for the LLC)Fix and flips + wholesaling will likely want to be done in an s-corp if you expect to generate a decent amount of ordinary income.

SE taxes, ordinary income taxes, state taxes, transfer taxes, recording  & escrow fees, title insurance, etc all left out....

There are many qualifications that must be met to be able to able to deduct losses against ordinary income.

If a property is pending sale, but is also the subject of on going foreclosure proceedings, it could be a short sale, or it could just be an ordinary sale, depending on the value and mortgage balance (with values skyrocketing, there have been very few short sales in recent years). 

Kitchen cabinets and countertopsA few door replacementsA 2nd level patio railing replacementI am planning to live in the unit for about a year, and then rent it out, so I would like to get it “tenant ready” before I move in.

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.

While you could choose an "S" corporation and have pass-through tax, there are a number of problems with this: (1) you are possibly creating character mis-matches of ordinary income and passive losses, depending upon the level of management activity you have; (2) a buyer is not generally likely to want to purchase your fractional interest in stock - they will insist on a discount or worse, an asset sale.