That term, for tax purposes, refers to someone who buys and sells property as a part of his or her trade or business.When doing lease option assignments you never take ownership of the property, so the term would not apply.That being said, income from lease option assignments is considered ordinary income and is taxed as such.

Check electrical circuits, brakers go bad over time, see if anything has been added like extension cords strung through the garage off one circuit or the wrong cord strung outside to a patio.

If so I have several more Questions that could impact on my options.I'll cover both scenarios here:If it was held personally.Yes, if they cut the check to your tomorrow, you have until the end of 2014 to either repair the property or purchase replacement property.The insurance proceeds will be taxed at ordinary rates.

As a passive investor with active participation you are allowed to take up to a 25K loss against ordinary income.

It can't be mid size or ordinary.

Seperate living spaces have been popular for decades and sell.As to the back, you won't need a full length lower deck or patio, but using bark or gravel along the length of the house nicely landscaped really sets the back entry off with a smaller area for BBQ and seating.Post some pics of the back, I'm sure you will get plenty of ideas.....

You want the lease to be the same as for an ordinary rental.

I quote:PROPERTY DAMAGE BETWEEN ACCEPTANCE AND CLOSING Seller shall maintain the property until the earlier of closing or occupancy of buyer in materially the same condition as of the date of acceptance of this offer, except for ordinary wear and tear.

Anyway, they were very critical of my bank statments and wanting justifications for all the "out of the ordinary" deposits we had.

Flipping is treated as ordinary income by the IRS.