Capital gain tax, what do you all do?

[Soren Ager]

Hello everyone

Long story short.... bought another house,and was set on making it a rental, but there is real potential to renovate the house and make a decent profit. I have all the numbers in place, and of course when it comes to capital gains tax, that is where I am a newbie (I know the %) 

My question is simply, when you all do a flip do you just pay the capital gains tax or is there ways to be smart about it? I am only asking for legal ways to do it.

Thank you. 

[Ned Carey]

@Soren Ager money made from rehabbing and flipping a house is considered ordinary income. You do not get the advantage of lower capital gains rates.  You may be able to save some self employment tax by doing the flips in a company taxed as an S Corp.

You may be able to use retirement funds for flipping and not be taxed  or at least defer the tax. however that means all the profits stay  in the retirement account. This is a complex issue that requires professional advice to do this properly.

look up Self directed IRA or 401K