., 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."

You'll pay ordinary taxes at your marginal rate, and you'll likely be on the hook for self-employment taxes as well.If you're looking to reduce your tax burden, you won't want to flip houses to do it.

Tenant agrees that upon expiration of the term of this lease, or upon the earlier termination of the lease for any cause, Tenant will at once peacefully surrender and deliver the Leased Premises together with all improvements thereon to Landlord in the same condition as received, ordinary wear and tear excepted.15.

I could have taken the money and run BUT I knew the power of wealth building buy and hold real estate.Had I taken the 10K, it would have been ordinary income taxed at the highest level and I would not make another dime on the property.

The house needs $15K external update (replace sidings, patio covers etc) and $20K inside update.  

@Ramin Yesharim: So let's go question by question:1) Main Challenges of initial funding: I don't believe there are any out of the ordinary challenges here.

Contractor number 1 burned me by trying to charge 3k for a 700 patio (idiot I had so much work for him) so I challenged it on my credit card and one.

Can you use it as a patio?

Also be aware the sell will have to pay taxes if your offer is accepted on 34,500 of ordinary income.