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Updated about 3 years ago on . Most recent reply

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Anthony Howell
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Is note flipping taxed the same as house flipping?

Anthony Howell
Posted
I was thinking about flipping a seller carry back note. I am new to the notes and real estate business and wanted to know how that would work tax wise. I understand that if I were to flip a house I would be subjected to heavy taxes. If I were to flip a note would I still be subjected to heavy taxes?

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Chris Seveney
  • Investor
  • Virginia
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Chris Seveney
  • Investor
  • Virginia
ModeratorReplied

@Anthony Howell

Interest on notes is ordinary income. Selling a note no matter how long you owned it is still ordinary income. This according to the two CPA’s I use.

Please consult your tax advisor.

If you flip one note and can do it in a sdira or 401k that is better but if you flip many notes then it could be construed as being active and subject to tax and penalties. Again speak to a tax advisor.

  • Chris Seveney
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