Posted by Alex on October 25, 2005 at 20:54:28:
Thanks for your response!
Now, if I do a Flip, I should pay 15% Taxes ONLY on Capital Gain right? Since I signed a Purchase-Sale Agreement back in October 2004 and it has been in construction for a year…let me know if I am assuming right? I no dot have experience in Real Estate…
Tax Savings - Posted by Alex
Posted by Alex on October 25, 2005 at 14:51:42:
Hi!
This is first time I am posting here, I believe this is a great site to Q&A as I have been surfing through it.
My case is probably a unique deal and I need some advice.
I bought a Pre-Construction Townhouse back on October 2004 in Florida, I was living in Florida back then, my plan was to flip my 900SqFt Condo for this brand new 1700Sqft, unfortunately in April 2005 the company I was working for decided to close Florida Branch and offer me a position in Arkansas, and I accepted it. I sold my Condo back in April, took my capital gain not subject to pay taxes since it was my primary home for more that 3 years and leave Florida. The new townhouse will be ready this December and I am planning to sell. My question is, Can I do a 1031 Exchange and buy a primary home here in Arkansas with gain from selling this new townhouse in Florida? How will it affect me if I decide to leave Arkansas later on (2 to 3 years) and I have to sell property? Does anyone has any other advice so I pay the minimun taxes possible with these transactions?
Thanks for your help!
(You probably asking, How the hell he went to Arkansas after living in Florida, well that is another story I will tell you later…)
Re: Tax Savings - Posted by River City
Posted by River City on October 28, 2005 at 07:38:32:
(You probably asking, How the hell he went to Arkansas after living in Florida…)
That is exactly what I was thinking. Why would anyone in their right mind move from Florida to Arkansas??? Of course, I was born in Florida and love it, hurricanes or no hurricanes. Anyway, good luck on your move.
Re: Tax Savings - Posted by dealmaker
Posted by dealmaker on October 25, 2005 at 15:36:24:
Sorry, you can’t do a 1031 into a primary residence. It must be for another “investment” property. You COULD exchange into a rental in AR, rent it for a couple of years and then move into it, that’s what we did.
On the other hand it might just be better to flip it and pay the short term cap gains, which is the same as your ordinary income tax rate.
dealmaker