Not sure on the land contract or balloon payments.If you do not own a property for at least a year, your fear should be being taxed as "ordinary income" instead of capital gains.

When you hold property for cash flow and depreciation, its best to incur as many ordinary expenses as possible.

Based on your plan you would be taxed at ordinary income rates, not capital gains.If you did that many houses you would be considered a dealer and may be subject to self-employment tax as well. 8)

I would expect for higher taxes to be paid to faster growing and more affluent neighborhoods as the tax payment requirements go up.

**Individual and Joint Filers:** The exclusion is available to individual taxpayers, as well as married couples filing jointly.

If not, I'd but you could find an investor who's looking for more turn key properties who would take it off your hands with an ordinary loan at a nice profit.

Income from all of those is taxed at ordinary income tax rates.

In the latter case, Sec. 170(f)(3)(A) specifically states that "a contribution by a taxpayer of the right to use property shall be treated as a contribution of less than the taxpayer's entire interest in such property".

A "few scuff marks" would be considered ordinary wear-and-tear.

@Kevin Romines @Marshall Secord Mostly good info, but one error….”short term cap gains” are not 20%…it is simply ordinary income tax without the 15.3% self employment.