This decision by the day traders was rational in the sense they could use this tax money to make more money in the long run to more than cover the extra interest and penalties they would incur from delaying their tax payments.

Business = ordinary rates + 15% SE tax.In case of a rental, you owe capital gain taxes on the 20% of the $30,000 down payment.Both scenarios above are over-simplified.

Still, in any event, someone needs to put down $2,500 to get on a tax payment plan.

The “real estate” professional qualification allows the deduction of RE losses against ordinary income.

Yes, the acquisition costs is an expense for you and the interest income is ordinary income providing that you are not acquiring notes in a tax-sheltered environment such as a self-directed IRA.

The replacement property must be owned for at least 24 months immediately after the exchange (the qualifying period) and in each of the two 12-month periods in the qualifying period: (1) the taxpayer must rent the replacement property to another person at a fair rental for 14 days or more; and (2) the taxpayer’s personal use of the replacement property must not exceed the greater of 14 days or 10% of the number of days during the 12-month period that the dwelling unit is rented at fair rental.

Keep in mind the basic 1031 rules:Must complete within 180 calendar days of the sale of your relinquished propertyMust identify (up to 3) replacement properties within 45 daysOnly complete tax deferral if the final value of the replacement property(ies)equal at least as much as your net sale price for the relinquished property.If you trade down in value, the difference is taxableKeep the same taxpayer across propertiesYou can exchange into (and out of) any state and many US territoriesThere are lots of different assets that qualify as valid replacement targets in a 1031, so think broadly

If the taxpayer has not redeemed within 3 years after the auction, then the certificate holder can surrender their certificate to the probate judge in the county where the property is located, pay a $5 fee, and receive a tax deed.

So the attorneys look for them during title search and require that they be paid off at closing.I'm not sure how Trustee Deeds work in your state but from  what I've seen in the quiet title cases that I've studied, the IRS will typically release their lien on the property and allow the quiet title to move forward while reserving their right to lien upon the remainder of the taxpayer's property.

Anything beyond that creates a passive loss, and most people are limited in how much passive loss they can use in the current year.Someone who qualifies as a ‘Real Estate Professional’, does not have the passive loss limitation, and can use those extra deductions to offset ordinary income as well.