If you are describing Cap Gains, in 6 months or less, then these are Short Term Cap Gain; (STCG). STCG are taxed at the same rate as your marginal tax rate; like 28%, or as high as 38% in 2002. In order to qualify for tax favored Cap Gains, you must hold the investment for longer than 12 months.
As to whether the IRS will view your activity as income, instead of STCG? Probably… You may want to review an article by John Hyre, in the How To Article Section of this site, where he discusses “Dealer Activity” in detail.
Posted by Kevin Hoskins on January 01, 2002 at 20:17:47:
How much will I have to pay for capital gains tax on profits from houses that I buy and resell in 6 months or less? Does it make a difference whether the deals are being run through my S-Corporation or not? Lastly, considering that I am investing in real estate full-time, will the IRS view my profits as income instead of capital gains?
Thanks in advance for your insights,
Kevin R. Hoskins
KEVLIS CORPORATION
PO Box 5893
Bellingham, WA 98227-5893