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.  

Depending on which legal entity you use to conduct your wholesaling, you may have to pay extra self employment taxes on top of ordinary income taxes.(2) I put together a great YouTube video a while back to answer this exact question.

the way I would accomplish this is for the seller and the buyer settle with you being on the HUD -1 as an assignment fee.You would not benefit tax wise, your assignment fee would be taxable as ordinary income.   

Yes we also profit from property management so nothing her out of the ordinary. 

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.

I'll try to explain the various levels of participation and how you can take passive losses against ordinary income.Under Section 469, an activity is classified as passive if the activity is a trade or business activity in which the taxpayer does not materially participate during the year or a rental activity.Section 469(i)(1) permits certain taxpayers who actively participate in rental real estate activity to deduct up to $25,000 of losses arising from the rental real estate activity, if the taxpayer cannot meet the material participation test required to be categorized as a real estate professional.The $25,000 permitted loss is reduced by 50% of the taxpayer's adjusted gross income (AGI) in excess of $100,000.

MLS Number:        23888    List Price:        $88,900    Street #:        101    Street Name:        Bellaire    City:        Vicksburg    State:        MS    Zip Code:        39180    Subdivision:        City-Vicksburg    Area:        Vicksburg    Apx Acres:        0.7    Apx GLA/SqFt:        1311    # Bedrooms:        3    # Full Baths:        2    # Half Baths:        0    Apx Year Built:        1965    Type:        Single Family, < 1 acre    Style:        1 StoryExterior:        Brick, Wood Siding    Roof:        Composition Shingle    Foundation/Basement:        Slab, Full    Flooring:        Carpet, Vinyl Sheet    Walls:        Panel, Sheet Rock    Auto Capacity/Garage Type:        Two, Attached, Carport    Heating:        Central    Cooling:        Central Air    Water Heater:        Electric    Water/Sewer:        City Water, City Sewer    Gas:        Natural    Fireplace:        None    Laundry:        Electric, Inside    Interior Features:        8 ft Ceiling    Other Rooms:        Laundry Room, Master Bath    Appliances:        Dishwasher, Garbage Disposal, Stove, Ventahood    Exterior Amenities:        None    Fencing:        None    Patio/Porch:        Porch    

It was a 15 month flip, ordinary income.