Taxing on "net" proceeds on a HUD

[Scot Howat]

How do I avoid taxes if I use my own funds for the rehab costs and downpayment?

Other than a 1031...

Example

If I put down 20k (20% of 100k purchase price) and put another 20k into the rehab and sell it for 150k, I would get a check from escrow for $70,000, when in reality I would "net" about $30,000.  But I would be taxed on the whole 70k right? 

Or is there a way that I could only be taxed on my "net" profits??