@Connor ChanterI'm not a CPA but based on your post as long as your mom is the owner of the house in Michigan she should qualify for the $500k capital gains exemption.

Having been in the lending space for a while now,  Interest income is not passive - its considered/taxed as ordinary income- just like interest you receive from your bank and savings account.Regarding profit and expenses from a flip, "that depends" on many factors but again if its short term capital gains, its not tax friendly.As always consult with your tax advisor / CPA. 

Give your interest statement to CPA when filing taxes for more write off. 

What you will be required to do is register as a foreign entity in the state the property is in if it’s not the home state.I recommend speaking with an attorney and your cpa on if a LLC is even required and the state(s) to incorporate it in.

This post does not create an attorney-client or CPA-client relationship.

I can't speak for the taxes or how to handle that so ask your CPA when the time is right. 

*This post does not create a CPA-Client relationship.

*This post does not create a CPA-Client relationship.

You’d want to consult with a CPA to see which option aligns better with your tax strategy, especially given your other business expenses.PS: Fun fact—Bobcat is a brand name, but it’s often used to describe any compact excavator.

As a layman, I don't run into them, and usually need my cpa to reference one / send it to me to read to educate myself.