When do I pay taxes for a flip?

[Inmer Manzanarez]

I want to know when I will pay taxes if I do a flip?

[Michael Plaks]

Originally posted by @Inmer Manzanarez:

I want to know when I will pay taxes if I do a flip?

You do not pay taxes on a flip. You pay taxes on your total annual results of income minus expenses.

Example:

1st flip - lost $20k after all expenses are counted, and the dust settled (95% of new investors lose money on their first flip)

2nd flip - broke even

3rd flip - made $50k

overhead expenses for the year, such as marketing, training and driving: $25k

The following spring, you will owe taxes on  -$20k +$0 +$50k - $25k = $5k