Only your management fee is taxable income, reported on Schedule C.The rent you forward to them isn’t deductible, it just shouldn’t be included in your income if properly documented.

We are trying to keep our PITI payment under my monthly, non-taxable housing allowance but the seller has dug their heels in and won't budge, if we were to agree to his price we would be roughly $150 over my monthly housing allowance for the rest of the year, next year with an allowance increase and tax decrease it would likely be under the allowance. 

Long-Term Gain (owned more than 1 year): Qualifies for preferential tax treatment—taxed at 0%, 15%, or 20%, depending on your taxable income and filing status.Because you've owned the property for less than a year, any profit will be taxed as ordinary income—not at the lower long-term capital gains rate.2. 1031 Exchange Holding PeriodsIt’s a common belief—and good practice—that you need to own a property for at least a year to qualify for a 1031 exchange.

The last thing you want is for the market to dip right before you’re ready to buy, potentially shrinking your buying power.On the other hand, if your timeline is 3 years or more, it’s reasonable to keep a portion of your savings in a taxable brokerage account to benefit from market growth but plan to gradually shift those funds into cash or safer assets as you get closer to purchasing.Key considerations:Real estate transactions move fast, and you’ll need cash available not just for the down payment, but also closing costs, reserves, and early repairs.If you sell appreciated stocks, you could face capital gains tax, especially if held less than a year (short-term capital gains are taxed at your ordinary income rate).You’re on the right path.

Wholesale online seems a lot cheaper but getting a company to do the installation worries me, does anybody order online and then pay for install? 

The state doesn’t follow federal deferral rules for excise tax purposes, so the gain is included in your TN taxable income when the property is sold.

@Andrew SangarTo address your second question about getting something cheaper or more expensive - there's always going to be tradeoffs so it's important you be honest about what makes sense for you. 

This allows the seller to defer capital gains taxes by spreading out the recognition of taxable income over a period of years, rather than recognizing it all in the year of sale”the way either works “in the place of” a 1031 is simply is simply to spread the recognition of the capital gains over several years to keep you out of higher tax brackets.    . 

If you sell for $2.5M, that leaves you with a $1.43M gain—$930K taxable after the exclusion.

@Kate McDevitt Asolutely, here's a clearer breakdown with key points to help you make the best tax-smart decision in this situation:If your uncle adds you to the deed before the sale:You inherit his original cost basis ($180K plus improvements).If you sell at $700K, your taxable gain could be over $500K, depending on what improvements can be documented.You won’t qualify for the Section 121 exclusion, which allows homeowners to exclude up to $500K in capital gains (if married, filing jointly) if they lived in the property for 2 out of the last 5 years.Tax impact:Without the exclusion, your gain is taxed as a long-term capital gain, typically at 15–20% federal (plus any state tax, especially if you're in a high-tax state).This could mean a five-figure tax bill, even if your uncle gifted the proceeds.Better alternative:Let your uncle and aunt sell the property in their name and use the Section 121 exclusion to potentially eliminate all or most capital gains taxes.After the sale, they can gift you the proceeds:Up to $18,000 per person (annual exclusion) without filing.Above that, they can file a gift tax return (Form 709), which uses part of their lifetime exemption (over $13 million), so no gift tax is due in most cases.If deed transfer is unavoidable:Keep records of all capital improvements (e.g., new kitchen, HVAC) to raise your cost basis.Understand that repairs and cosmetic updates don’t count toward increasing the basis.Letting your uncle sell and then gifting the proceeds is the cleanest and most tax-efficient strategy.