Flip and Rental Tax Consequences

[Joel Falk]

I did some very informative reading of the archives trying to find an answer to this, but up to now have not found anything that answers this . I'directlym almost 47 and getting tired of the rat race. I want to keep working until 50 minimum so that I get my employer's retirement healthcare stipend, but would like to "retire" to pursue REI full time as early as possible after that. So my near term goal is to build up a stable of rentals to replace some/all of my income so to make this possible. I do not want or need to take any of the eventual rental income today, I'd like to continue to reinvest it to produce an income stream for retirement.

Is it possible to buy a house, rehab it, and sell it and gain $50k, and use the proceeds of that to buy a long term rental property, and avoid tax by structuring the buying entity in a certain way (S-Corp, C-Corp, LLC? Not sure …)? My thought is that if the 50k gain is immediately reinvested into rental stock, the actual net income is zero, but I'm almost sure I'm oversimplifying things.

Assuming the answer is "no you cannot", is there any way to do flips to fund rentals that minimize current tax obligations (dumping 100% of proceeds into solo 401k, and then taking loans from 401k to fund the rental downpayment/repairs)?