I also realize that I will pay a penalty and I will pay ordinary income tax on the money. 

A decision to accelerate an expense or to defer an item of income to reduce taxable income for regular tax purposes may not save taxes if the taxpayer is subject to the AMTCapital Gain planning:Since short-term capital gains are taxed at the ordinary rate.

Active businesses (which real estate professionals fall into, at least based on my understanding) would have 30% of their business income taxed at a 25% rate (under the safe harbor) and the remaining 70% will be taxed at the ordinary income rate.

Mortgage brokering does not generate real estate rental income, but rather ordinary business income.

As I begin my real estate investing journey to be able to generate passive income for the day that i want to slow down/step back, I realize the same thing that you mentioned about having to pay tax on real estate income at ordinary rates right now if I don’t show with enough “stuff” to offset that income.

@Mathew Zorn,There are various stuff that you can deduct.Rather than giving you the list, first, let me say that you can deduct expenses that meet these two criterions: Ordinary Course of BusinessNecessary in the course of businessHere is the list some of the items:1) Mileage: any mileage that is associated with the rental activity.

I find City does not want to comply and even with rules on builders side, there no money to fight .  2nd: any grade, flood, fire or density is another issue city will wave the flag on. 3rd: finding builders that have confidence to work in confine yard, things out of the ordinary. 

If you report the sale of property under the installment method, any depreciation recapture under section 1245 or 1250 is taxable as ordinary income in the year of sale.

Here is what the IRS says:To be deductible, a business expense must be both ordinary and necessary.

@Will StahlTo be deductible, a business expense must be both ordinary and necessary.