Based on that guidance I will describe what we have done. 

What you are describing is fraud. 

And the meanings of the words as described by the "preamble" of the law.

If you are spending that much time on the activities you describe, then you are not very efficient. 

But you can still treat it as resulting in Ordinary Income even though it is reported on Schedule E, which lets you properly report in accordance with the tax results it seems you are shooting for under the tax return loophole.If your CPA is looking at switching it between schedules to get that tax result...it sounds like they don't understand the reporting position fully and/or they just don't know how to use their own software to address it.In summary, based on what you are describing for the situation, it should go on Schedule E, with what sounds like the resulting refund of $17k.

Every example I give to describe a strategy or REI principle, I use numbers to show how and why,...and they all come from real deals.However, I'll give you an example of one we just got (I have a partner) in a western suburb of Detroit. 

I haven't worked with a lender who would not release some, but not all of the lots out of a loan in the scenario you're describing.

The current NAR Buyer Representation Agreement already includes all the elements you describe as the solution.

Imran,Your question is complicated, but the short answer is "not as you describe it."   

For us having a system like described means that we "know our numbers" which is critical in actually understanding where you are.