Help with a Spec. Home!!!

[Camronn W.]

A novice question here, figured I can ask the Bigger pockets community for some quick help. I'm beginning the process of building my first spec home. How does the tax side of the sale go when I resell? I know it being considered a capital gain, it changes things as to what I am use to doing. My LLC is setup currently for my rental portfolio... Should I transfer the building into the LLC before reselling? Or is that a completely different structured LLC for building a spec home for capital gains. I'm aware of the 1031 exchange also, just looking for some advice on the process.

-Thank you

[Wayne Brooks]

Profits from building a spec home are ordinary income, plus med/SS, period. No cap gains or 1031. The med/SS may can be avoided if your LLC is taxed as an S Corp. Talk to your CPA, which knows your whole picture.