[abmasnd]

If I invest money from my home equity line-of-credit by loaning it as a mortgage lender for an LLC to purchase and improve a house (with this money) and they sell the house and pay me 15% (plus my initial investment), what kind of income is that to me and what is the tax rate on it?

[MukatA]

Check with the mortgage lender who they are reporting your income. If they give you 1099-misc, it will show how much you earned.
1099-misc (nonemployee compensation) income: You are self employed or independent contractor. You must file your tax return if yourself employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040). For this you will use schedule SE (Form 1040). For 2012 after payroll tax cut the SE tax is 13.3%. Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor

[AtlantaTaxExpert]

MukatA covers it we.