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Tax implications of Flipping SFH in CA?
Hi All,
What are some tax implications to keep in mind for flipping a single-family home in California? For example, if I were to purchase a home for $1M, fix it up then sell it for $1.4M, how much of that $400k gain would be taxed?
We are real estate investors that primarily invest in commercial assets. This will be our first venture into flipping SFH. Would we be automatically classified as real estate dealers in the eyes of the IRS for this one flip? If we are classified as dealers under the tax code, it seems any profit a partner takes home would be taxed at their ordinary income rate vs. capital gains tax if we were considered investors?
I'm relatively new to this so just trying to understand these tax implications before we get started. Appreciate any insight!