All Forum Posts by: Jacob Patterson

Thanks, everyone, for the input!

Steven,

Correct me if I'm wrong, but you are saying that based on these facts this is a long term gain rather than income? I purchased the home in April 2013, but did not move into it until December of 2013. I plan to sell the home within the next few months. I am definitely selling, rather than holding onto the property until December 2015 (ownership and use exception). Therefore, when filing my tax return this is a long term investment not regular income (of which I would pay self employment tax)?

Thank you for your advice.

I understand the exemption law. It will not apply in this case. I want to know whether it will be taxed as long term capital gains or if it will be taxed as business income (which would also be the additional 15% self employment). I would think it would be capital gains, but I'm not sure if the IRS would say it is rather part of my business. I planned to live here longer, but the move is a better investment/opportunity/location. It is not part of the exemption or exception whatsoever.

I purchased a house in my business, LLC with the intention of flipping the house. However, after consideration, I plan to move into the house myself. For tax purposes, I pay income as well as self employment tax on my gains from the sales of my properties. I have also been recorded my business expenses on this house, throughout the project. How do I transfer, ethically and lawfully, the property to my name? I know I can quit claim it, but should I do a sale of the property for the amount I spent, including original purchase price and expenses? Thus making the gain zero? What is the proper way to do this? Let me know if you need more information. Thanks!

I regularly flip houses, and consider it my business for tax purposes. Thus, I pay income tax, as well as self employment tax on my gains. I am planning to sell my personal residence, most likely with a profit, and would appreciate input on the tax consequences. I will not qualify for the exemption because I did not own and use the property for 2 years. However, I will have owned the home over a year. My understanding is that I will owe long term gain tax. However, I want to be sure this is right. If my business is basically flipping homes, I want to make sure I shouldn't include this in my regular income as well (and pay income plus self employment based on the gain). I am living in the home. Let me know if you need more information to answer this question. Thanks so much!

Thanks for the response Marcia!

Can I get a HELOC w/o income verification? Possibly from a small bank that does portfolio lending???

For starters I would change your major from business economics to Real Estate and then just buy a few books on business economics to read on the side. After you get your degree in Real Estate I would then get your license. This is probably, given you do not have money or family money, the best way to get your foot in the door.

Are you looking to flip it or buy and hold?

One more tid bit of info. I'm purchasing the home for 91k I am putting about 15k into it and the ARV will be around 150k

I have a question about refinancing in the event a flip doesn't go as planned. I currently am just about to start a fix and flip and wanted to look into other exit options. My question is if I buy, renovate, and find a tenant will I be able to refinance the home just based on that rental contract? I'm just starting out and I do not have a steady income. I do know that the bank usually wants to see a steady income to refinance but I wasn't sure if having the home rented changes anything. I do own another home outright that I currently live in but that isn't making me any income.