Tax Implications of Holding Period for Property Flip in Florida

[Saar Amit]

Hi everyone,

I have a few questions regarding the tax implications of flipping a property in Florida:

1. 1. What are the differences in tax rates if I hold the property for less than one year versus more than one year? Is the holding period calculated from the purchase date to the sale date?
2. 2. For a property flip, how is the duration of ownership calculated? Does it start from the purchase date to the sale date?
3. 3. How does a 1031 exchange work in this scenario? If I flip a house and make a profit after 6 months, then buy a new property 3 months later, what taxes will I be obligated to pay?

Any insights or resources would be greatly appreciated!

Thanks in advance!

[Basit Siddiqi]

I find it that many people have a different definition of 'flipping'.

I find it that people either mean
1. The intent to buy, rehab and sell immediately after it is rehabbed.
There is no intent to hold it as a long-term investment
2. Flip is another word that people use to mean sell but after it was held as a long-term investment.

The intent is important here as it will determine whether the sale will be eligible for a 1031 exchange or if the gain can be eligible for capital gain treatment.

Best of luck.