Selling property tax implications

[Kirk Roberts]

So I have a fix and flip that I bought roughly 8 months ago. I now have it under contract.

I've been talking with my accountant to try to figure out tax implications or deferring taxes through a 1031. Needless to say, not to much help. Telling me a 1031 is difficult and cumbersome. Also the property is held in my name and heard there are better tax benefits if it's in an LLC. They said no since I'm a schedule C, since my business is part of my 1040 return.

I really want to either buy another fix and flip or STR. I don't want to turn this into a rental for numerous reasons.

If I don't do a 1031 how can I reinvest this money into more real estate without tax implications killing me.

Any insight is appreciated.

[Kevin Sobilo]

@Kirk Roberts, first off if your accountant believes 1031 exchanges are too difficult you might want to shop around for another accountant. Maybe they don't handle a lot of real estate investing.

In any event, I don't believe a 1031 is an option here because you didn't buy the property to use as an investment, you bought it to fix and resell. For questions about 1031 exchanges find a licensed 1031 intermediary. They would be the ones you need to use to handle an exchange anyways not an accountant and they would know all the ins and outs.

I don't think there is any way to avoid paying taxes on this deal. Also consider that this is why many people focus on investing in real estate rather than flipping or wholesaling. Owning real estate has tax benefits that "dealing" in real estate does not.