For all intents and purposes, your effective rate will be about the same.

I have been lurking around for while and I have a question I can't find the answer to.Lets say I am renting out a home for $1,000 a month and I am setting aside 25% (lumped CapEx, Maintenance,  Vacancy).At the end of the year, I have a reserve of $3,000 designated for a certain purpose.

Closing under an LLC is for tax purposes.

I blame it on my ESL classes.By the way, I seem to not be the only one confused, judging from this article:https://www.bisnow.com/national/news/economy/construction-companies-eligible-for-cash-under-cares-act-but-homebuilders-still-in-limbo-103805PART 2 - INVESTING and SBAThat old SBA guide (and it is specifically referred to in the SBA guidance on PPP) has another troubling section, listing businesses that are ineligible:"Passive Businesses (13 CFR 120.110 (c))(1) Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except Eligible Passive Companies under 120.111) are not eligible.(2) Businesses primarily engaged in subdividing real property into lots and developing it for resale on its own account are not eligible.(3) Businesses that are primarily engaged in owning or purchasing real estate and leasing it for any purpose are not eligible.

First off, I admit that I know very little about Memphis and the purpose of the post isn't to trash Memphis. 

For income-tax purposes, consult with your CPA! 

Not necessarily interested in doing wholesaling but I want to understand the ins and outs for educational purposes. 

The activities of wife with respect to the rental properties included, among other things, cleaning common areas, collecting coins from washing machines, performing repairs at the properties, communicating with tenants, collecting and depositing rent, maintaining insurance policies, purchasing materials for the properties, as needed, paying bills and keeping books and records for tax accounting purposes.

Hopefully on some decent land for the purpose to build another duplex on it and rent the other units out.

The "purpose" of the co-op is to vet who lives in the building and establish what is/is not allowed.