Capital gains are for an asset that you intend to buy and hold, not fix and flip or even build from the ground up.The IRS says this:The following transactions result in gain or loss subject to section 1231 treatment.

The also did mention some of the numbers are lower because one of the tenants takes care of some maintenance/landscaping etc items"Thanks,Mike

There are lots of other DD items to clear.

The big ticket items in Atlanta when something goes wrong tend to be water in the basement or crawlspace or having to dig up the septic system.    

She advised this was due to previous job loss and living off a credit card.  

Taxes are generally your single largest line item expense which is why I don't like TX.

We used to live in Bel Air (off of Moore's Mill and Hickory) and still rent out our old townhome there (unfortunately, at a loss).  

If you rely entirely on rental income for your income, you should have enough properties & diversity that the loss of income from one location will not bankrupt you or force you into making a bad financial decision to recover/replace the income, and enough cash reserves to weather any local downturns.

Once you receive an approved building permit, and at the last minute decide you want to extend the porch a foot out, or add a covered deck, what would the typical process to do so be? I'm assuming some sort of approva...

I would draw up your proposal with all your info - express your sympathy for their loss and that you understand their situation and would like to help.