All Forum Posts by: Colton Joseph

Thanks you VERY much for the link as it had a lot of useful information! I honestly never heard of a "dealer" when referring to real estate. I will definitely have to find someone much more experienced when it comes time to file this year as it looks like the CPA I used had no idea when it came to all of this. I suppose a "dealer" would be charged normal tax rates according to the typical income brackets correct?

And I agree thats what I was afraid of on the ability to get a mortgage after filing this years taxes due to the way mine were filed last year. Hopefully a portfolio lender will bend a bit with the right amount down, but i'm not too certain!

I'm very young and still got a heck of a lot to learn so everyone here is greatly appreciated! 

Thanks again @Stephanie Medellin

Thanks for the replies! Yes @Stephanie Medellin I should have been a bit more clear... I buy and sell vacant land and do not have any income properties. Thanks for the input @Steven Hamilton II Thats honestly what I had feared, but I was a late filer filing for my first time so I didn't ask the appropriate questions, and was just in a rush to get them done (not smart!) 

I suppose these should be filed as self employment taxes? Would the same form be used, but filed as business income instead of capital gains?

example for 2016...

I buy a vacant lot 1/1/16 for $20,000 and sell on 6/1/16 for 42,000...

Also buy a vacant lot on 1/1/16 for $40,000, and sell on 6/1/16 for $80,000

Total income for 2016 is $62,000 (minus closing costs.) Should this be filed on a 1040? If not what form should be used? Do I still qualify for the standard deduction? 

Thanks again for your knowledge!

Hello BP users... As always I am here for a bit of advice from all of you that know more than me!

I am looking to get a 30 year fixed mortgage shortly (construction to perm to be exact.) and am trying to find out the best way to file 2016 taxes to increase chances of approval. I am a full time real estate investor, and so far have only dealt with properties in my personal name (no LLC or company.) When I took my tax returns to a CPA last year he filed them all as Capital Gains on a form 1040.

When shopping for a mortgage earlier this year I ran into a couple local banks that wanted 3 years of returns due to the way they were filed. Do any of you guys have a better way I should file my 2016 taxes to look more "legit" to a bank that will make getting a mortgage easier as soon as filing? Any help would be great as I am wanting to get into my own place as soon as possible! Note I will be putting the land as well as cash to equal %20 (or more if required.) in order to get good terms.

Thanks in Advance!

Hello all, I am looking for recommendations for a contractor for a new build in the leander area north of Austin. I am looking to build a 1338 Sq Ft 2 story 3 bed 2 bath on a flat lot with water and sewer in place. I am looking for a low cost builder, and need to stay around 85-90 PSF exclusive of utilities. It is a very simple floor plan and am not expecting top $$$ finishes for that price. I'm looking along the lines of plain stained concrete, $3 psf tile/carpet etc and nice box store cabinets not a glitzy custom project. If you know anyone that can get this done I would be glad to connect with more specifics!

Thanks in advance!- Colton

Hello all, I am looking for recommendations for a contractor for a new build in the leander area north of Austin. I am looking to build a 1338 Sq Ft 2 story 3 bed 2 bath on a flat lot with water and sewer in place. I am looking for a low cost builder, and need to stay around 85-90 PSF exclusive of utilities. It is a very simple floor plan and am not expecting top $$$ finishes for that price. I'm looking along the lines of plain stained concrete, $3 psf tile/carpet etc and nice box store cabinets not a glitzy custom project. If you know anyone that can get this done I would be glad to connect with more specifics!

Thanks in advance!- Colton

@Dave Toelkes thanks for the clarification. That makes sense now, and is much less taxing on the profits. I would definitely like to get to where I could build, occupy, and sell every two years if the profits were right! 

@Dave Toelkes thank you very much for your detailed response! That helped me realize that it seems capital gains taxes will be larger than the ordinary tax rate of the capital gains itself moves me up a bracket (or two.) that was very helpful if I read that right! It is definitely going to be my only residence but if the chance is there to make a good profit it will be hard for me to resist putting it on the market. It looks like it will be a lot to consider, and I will speak with a tax professional before making any true decisions on if it will be better to wait over one year, or over two years before listing as taxes would take a huge chunk of the profit in most situations it seems. Thanks again for taking the time!

Thanks for the opinions! @Walker Seid thats a very good point. I didn't think about that, but it makes sense because at closing you are basically giving the land to the bank, and re-buying it with the home. I suppose using a OTC loan would be beneficial because then the construction period would still count in the timeline. Thanks also to @Brandon Battle. The way I read it being in a normal tax bracket of only 10% if it was sold as a short term capital gain it would be taxed at 10%, but if sold as a long term it would be 0%. I understood long term to be over 12 months, but could be wrong! I will definitely consult a CPA, but was just looking for opinions. The house will be going up either way, but the tax implications could say how long I keep it :p

Lets see if anyone can help me with this scenario as I may face it in the near future...

For scenario reasoning lets say I am typically in the 10% tax bracket.

I purchase a lot on January 1, 2016 for $18,000 and start to build a home in June 2016 as a primary residence which costs $160,000 to build. If I were to sell said home on January 2, 2017 for $275,000 what would be the tax implications? Say it is my first home if relevant. Would the capital gains timeline start at the purchase of the lot rather than build of the house? Anyone familiar with the capital gains tax code would be a great help!

@Lance Wakefield