Thanks for finding that one, breaks it down into plain language better than most I found.

IMHO, still way too many unknowns here to reach any particular conclusion.  The OP mentioned that the intent was to fix and rent so that probably rules out inventory treatment (which would be "fix and sell").  But that also doesn't scream "trade or business" either.  The intent could be to hold for the production of income instead of to operate as a T/B.  I'm not sure that changes the treatment, but I'm not sure it doesn't.  We also don't know what stage of completion the improvements were in.

Rick