First deal flip profit and taxes

[Nancy Bachety]

Hi - this is a forum I just discovered.

We're about to buy our first flip and expect gains this year, over and above our two W-2's. Can anyone speak of the losses doing a flip can use to minimize the tax consequences? I want to factor that in to the deal analyzer. 

 I know they'll want to tax it at the higher capital gains rate as opposed to the lower rate in a buy and hold scenario. 

Thanks for any advice. We haven't used a business entity as a tax saving vehicle until now.

[Steven Hamilton II]

Flips are not capital gains it is considered ordinary business income.  A buy and hold situation such as a rental exceeding a year plus one day would allow you to qualify for capital gains.