However the Cook County program has been improving in recent months, and Chicago is supposed to be working on theirs. 

Then meet with the broker and offer YOUR price. crunch the numbers as if you need to do the improvement and work on the Total COST base. 1963 Building may need re wiring and plumbing, new appliances etc etc - Tel all of that to the Broker/ Seller.Put an offer in with building inspection contingency, even if they want you to buy it As-Is.Make sure to put other contingencies according to your requirements. 

I have read about improvement exchanges and that won't work for what I am after.  

I would give her only a few days (other landlords can weigh in with Best Practice) to move out, clean, sign-off on ending lease mutually, only pay after inspection of property (and utilities, apparently, if you think she's breaking them) is complete and satisfactory.

I was wondering if others commonly request the seller / landlord's tax returns when buy a rental property. if so what is the common practice for this. would it have to go through an attorney to scrub the personal info?

I want to bump the price up to better reflect the market and improvements made to the house(central AC, paint, etc). 

Start practicing appraising properties and/or deals.

@JD Martin - Hello Sir,As one of the knowledgeable Solar Guys on this thread, I would say that watching the DIY stuff on youtube and other places may not be the best way to get a feel for installation practices.

Hopefully this will clear things up:You are correct with your understanding that you can't write off any costs related to inventory (the house) - whether that be the cost of the house, or items to improve the inventory (like lumber, paint, contractors, other flipping expenses).However, if the cost does not relate to the purchase or improvement of inventory (the house), it can be written off as operating costs, as you noted.

However it seems that some states are very strict about people who assign contracts and often come after them for practicing without a license(Ohio specifically).