Thursday, September 29, 2005

Tax Consequences of Flipping Houses

There's a good article at about the investment practice of flipping houses. With skyrocketing values of home across the nation, this has become an even more popular investment strategy.

A current client of mine recently bought a property and is wanting to flip it. I recommended she use it as a rental for a period of time, then sell it when it qualifies for a 1031 exchange. Under this strategy she could defer taxes. Surprisingly, her accountant told her not to worry about the tax implications because, if she was going to make a lot of profit, why would she care about paying part of it to taxes. I totally disagree with that thinking when there is a strategy to make the profit AND avoid the taxes.

Just so an investor considers all the possibilities and makes an informed decision, it's fine with me.

Yours for success & prosperity,


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