Start with the property manager, that way an ordinary agent doesn't over sell a properties' potential for a fee.

However, it is taxed at your ordinary rate UP TO 25%.How long have they held the property and what was their basis?

J Scott My CPA touched on the dealer status issue as well, describing how to set up multiple entities in order to treat flips as capital gains, rather than ordinary income.

That's taxed at your ordinary tax rate.

I'll offer this partial answer as my guess: Option payments only become ordinary income in the year that the tenant buyer walks on their option to buy, buy moving out, giving notice and you 2 don't have some change in heart and return some of their option.

Jimmy, there is no capital gains on a fix and flip, short or long term, it's ordinary income.I also am not aware of any proration on the primary residence exclusion.

That term, for tax purposes, refers to someone who buys and sells property as a part of his or her trade or business.When doing lease option assignments you never take ownership of the property, so the term would not apply.That being said, income from lease option assignments is considered ordinary income and is taxed as such.

If so I have several more Questions that could impact on my options.I'll cover both scenarios here:If it was held personally.Yes, if they cut the check to your tomorrow, you have until the end of 2014 to either repair the property or purchase replacement property.The insurance proceeds will be taxed at ordinary rates.

As a passive investor with active participation you are allowed to take up to a 25K loss against ordinary income.

It can't be mid size or ordinary.