New Construction Tax Considerations

[Brian Rudd]

Just finished construction on a duplex that I have a construction to primary residence permanent loan on with intent to occupy but after construction my life situation has changed and now I’m looking to sell.

I know that flipping, or homes built with the intention of sale are considered inventory and taxed as reg income but this wasn’t and I have owned the asset for over a year though I have NOT owned the completed home for a year. long-term or short-term cap gains?

[David Vanlandingham]

Short term capital gains. The construction period does not count as to when the property was placed into service. Once you have the CO and start advertising it for rent, the clock starts.