If you held it under a year and you're not a dealer, then it would be a short term capital gain, and taxed at your ordinary tax rate.

On visiting the property, the patio is closed with walls and windows.

If your S Corp profit was $30k after payroll and your wages were $5k, you will be paying income tax at your ordinary rates on $35k (even if you only took $20k of distributions out of the S Corp).The difference between wages and profit is self-employment tax.

There are multiple ways to skin a cat…I know, kind of an odd headline for a BP post on an ordinary Saturday morning LOL, but I think it works alright!

If you have a wood deck or patio, it's your responsibility to pull any weeds. 

Take calls on my patio while overlooking the bay. 

Finally, I imagine certain investors (either through syndications or active investments in real estate) amass a lot of passive losses which cannot be used to offset ordinary income. 

If you are a real estate professional you can then not only offset income from the property, you can offset your ordinary income.  

I bailed last second due to an attach custom covered patio that looked unpermitted and I didn't want to deal with the headache.

That seems really out of the ordinary.