Nothing that out of the ordinary about it and it's definitely on the tenant to foot the bill for mistaking a sewer smell for a gas leak.

Income from wholesaling is ordinary income and subject to federal, state, and local income taxes as well as self employment income (i.e., social security plus medicare, both halves, since its self employment income.)Passive losses from rentals can be used to offset ordinary income under limited circumstances:1) If your AGI is under $100K you can take up to $25,000 in passive losses against ordinary income.

Incidental sales could be a ST cap gain, but would still be at ordinary income tax rates.

The cold can be kept a bit at bay using heavy curtains or drapes over windows and doors (yes, I had some over a cold patio door in a an apartment I paid rent for many years ago).

Actually, I was predicating this on 30% ROI, which is very achievable and is conservative on leveraged buy and hold investments in this area of the country.And this doesn't even consider the hit taken down the road when you pay taxes on at least some portion of your retirement accounts at ordinary income tax rates (accept for a Roth, but I don't think that is what is being contemplated here).I agree that this would be more appropriate for those under 55.However, if you believe tax rates will be materially higher in the future (most sentient humans think this will be true), paying the taxes now at lower rates will offset at least some of the penalty.

A good example would be a garbage can.All expenses must be ordinary and necessary as well.

If you don't currently have a Roth IRA, you will pay ordinary income taxes on the fair market property value upon distribution.

All money withdrawn from the Traditional IRA (even capital gains) is taxed as ordinary income when withdrawn and, if applicable, early withdrawal penalties are assessed. 

For your flip property scenario, flip profit is taxed as ordinary income for both the pass through LLC and for the sole proprietor.  

What is true is that if you have net passive losses after accounting for depreciation on a deal inside an IRA that you cannot use those to offset your own ordinary income.