I don't remember the name of the thread a month or so ago; but, we decided then that one way to qualify a prospedt like this is to inspect how he is treating the property he lives in now.

The income will be taxed at ordinary rates regardless of when it it sold as the property is treated as inventory.If you hold the property as a rental and then sell, some of your profits will be taxed as capital gains.

My treat for letting me pick your brain.

the egress window shouldn't be a big deal if it's a walk out basement...just have a guy do some demo work and then frame it up for a window..use treated lumber for anything that touches block/brick/ground..if it's block or brick on the perimeter, have a mason come in after him to make it look good...make sure to verify egress requirements..in my area they get complicated..windows have to have so much surface area of glass, so much square feet of openable area (can't open both sashes at the same time), so much distance from floor, etc.

I treat it as an independent contractor situation.

At first I saw my property situation as an unfortunate means to an end, but since finding BP and all of the great people and information within, I’m starting to treat this more like a business.

One is that this may be treated as a sham transaction if there is no economic reason for doing this other than tax avoidance.Sounds to me like you are really selling an asset which means a purchase/sale agreement.

Or the tenant might have picked up used furniture that had been infested.Heat treating the unit should be effective, as long as the instructions for preparations are followed.

It sounds like each lender will treat class differently.

I'm going to hazard an answer to my question, correct me if I'm wrong.A) If the investment is by loan then they are like any other employee/contractor like I stated above for a renter.B) If the person is a partner, then it depends on the partnership was made up how the "contribution" is compensated for, but no W2 or 1099 is needed.If a corporation then the work could be treated either way.