Unfortunately I do not have much knowledge on the subject.

To them, it is the exact same business model and is subject to Self Employment Taxes as well as Income Taxes.  

But speaking from rental property experience, and talking A LOT with my tax accountant over the years to better understand this...I think you may be confusing your Schedule A deductions with Schedule E deductions.What you describe is basically correct for your Schedule A deductions, such as the mortgage interest and property taxes on your primary home or a second home.But rental property Income/Expenses are recorded on Schedule E, and are subject to Passive Activity rules.

If you tear it down first and things have changed when you try to obtain the new building permit you are now subject to the new and probably stricter guidelines.

The subject of SD IRA is a frequent topic here on the forum, you should search for previous posts and can learn a lot for other discussions. 

I've been reading LOTS of REI books over the past month after I decided that I want to stop dreaming and take a deliberate step to becoming more educated on the subject.

Optionor understands this Option Agreement is “subject to” Optionee finding a qualified End-Buyer.4.

Contact me if you get any good deals.I am looking to flip, buy and hold or do subject to financing.Bob

While the headline may sound harsh, with +1000 posts on BPper day, a subject line needs to be provocative for anyone to actually read it. 

In the end however what is "right" is subjective, disregarding legalities of course.