Reducing Capital Gain Taxes When Flipping Houses - Posted by Vince

Posted by dan on December 24, 2000 at 03:49:05:

please help me understand a little about the flipping of properties. I am currently a property manager who works independantly for various property owners. I think now is the time for me to buy my own properties, and really could use a little help in the flipping area. In return i can answer any questions about renting. As i make alot of money for others and save them alot of time and hastles…THANKS DAN

Reducing Capital Gain Taxes When Flipping Houses - Posted by Vince

Posted by Vince on December 07, 2000 at 24:21:00:

HI, I’m a novice at r.e. investing and purchased Carlton Sheets course 18 months ago and started buying properties with little money down and holding them for long term growth, so i’ve never sold a property before. However, about 5 months ago I purchased Ron LaGrand’s courses and learned about how to buy houses without liability and also FLIPPING HOUSES WHOLESALE FAST. The good news is I caught on to the concept quick and have flipped 4 houses in 4 months making around $20,000.00. The bad news came when my brother told me that I’m going to be taxed like crazy on this money come tax time due to capital gain taxes.

I am a beginner at this and though i’ve had some success I doubt I know more then 1% of what I should know.

To cut to the chase, I would appreciate if some of you more experienced investors, especially those who flip a lot of houses could give me some tips on how to make the tax hit a little easier if there are any ways at all.

I herd some things about self-directed IRA’s but not in detail or where to find more information about this. If anyone has any knowledge about this it would be greatly appreciated and I thank you in advance for your advise.

Reducing Capital Gain Taxes When Flipping Houses - Posted by CJ

Posted by CJ on December 09, 2000 at 23:06:51:

It would be nice if someone out there in experieced land would direct those of us in this category.I myself a newbie just completeing my third deal in 3 1/2 weeks with 3 more in the works feel the same as kevin here.In these first three deals I"gros 8K. Not bad for a new guy.I did it with a ton of questions and much footwork.Thanks to those participating on THIS site I have surpassed my origional goal.This was to do my first deal and maybey 1 more every 3-4 weeks.A slam dunk of 1 per week is what I am netting.Any info on the tax situation would be greatly appreciated.Again thankx CRE-ONLINE for all the help and support.

Congrats on the success… - Posted by Matt

Posted by Matt on December 16, 2000 at 08:58:22:

Congratulations on the success you are having being so new. I am also new and am wondering what you are doin right that you are getting so many offers and good deals? What ads do you run? How do you look for homes? How do you finance them? What else do you do to succeed? Any help you can provide to a fellow newbie who can’t wait to do his first deal would be greatly appreciated. By the way, on the tax question, I am a CPA, and really there seems to be no way around paying normal tax rates on these flips. This is because they are held less than a year, and therefore taxed at normal income rates, if over a year you would be getting the cap gain rates of 20 or 10%, depending on you tax bracket. As far as IRA goes, it seems that if somehow someone did use IRA funds to buy real estate, the gains are tax-deffered just like any capital gains on any other investment, but the money is tied up in the IRA till age 59 1/2, with a few exceptions of course. Once I start doing deals I just plan to put aside enough according to whatever bracket I am in at the time to cover the extra tax at year end. Hope some of this helps.
Wishing you continued success (maybe some of that will rub off!!!) Thanks again,

Re: Reducing Capital Gain Taxes When - Posted by Michael

Posted by Michael on December 14, 2000 at 23:08:56:

Did you own these houses?

Normal income 28% for me at leat, with a little self-employment tax. I am in Idaho…