Posted by Dave T on August 07, 2009 at 17:54:07:
1031 Exchange can not be used for flip property.
Capital Gains Tax - Posted by bob
Posted by bob on August 05, 2009 at 07:37:14:
I pay about 20% capital gains tax in my state if I flip a property. Is there any way to get around this? I have heard about assigning contracts to other investors and do a double closing but am not aware of how to use this procedure, and if I did learn this, would I still have the gains tax facing me? Thanks!!
Re: Capital Gains Tax - Posted by Dave T
Posted by Dave T on August 07, 2009 at 17:56:57:
More likely you have taxes withheld at a 20% rate. The actual capital gains tax you pay is determined when you file your tax return. If you have had too much withheld, you get a refund of the excess.
Re: Capital Gains Tax - Posted by Natalie-VA
Posted by Natalie-VA on August 06, 2009 at 18:07:32:
You still have to pay taxes if you assign contracts.
–Natalie
Well… - Posted by Jimmy
Posted by Jimmy on August 06, 2009 at 09:14:07:
you can get away with capital gain treatment for “flips” for a while, but if you ever are lucky enough to be audited, you will likely have that treatment rejected.
If you buy a property with the intention of re-selling it after making a few improvements, this property is not an investment property for purposes of federal tax law. it is inventory. and any gain or loss you realize on resale will be ordinary income.
if we are talking about some big numbers, you could consider a Section 1031 exchange. that would allow you to defer the gain.