Thursday, September 29, 2005
Tax Consequences of Flipping Houses
There's a good article at Bankrate.com 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,
Posted by Carol at 9:58 PM