All Forum Posts by: Robyn Smyles

@Basit Siddiqi. Thank you for this information.  Our renovations are focused mainly on our personal home ( so we have never had to pay capital gains as we keep them atleast 2 years).  So this is all a new to us. We have spent 29 years renovating homes. We do it all.  So we are experts in that arena, but the financing and taxes is all new to us.   I’m not familiar with the net investment income tax.  

Originally posted by @John Duston:

@Robyn Smyles

It would be off the adjusted gross income plus the capital gains. It sounds like you were living in the house in order to claim the primary residence exclusion in the past. You should really talk to your CPA about the scenario so that they can give you specific numbers.

John, 

Thank you for taking the time to share your expertise.  
We have always lived in the homes we renovate.  That is the case with the current home. 

April 1,2022 will be the 2 year mark. 
We look to profit 250-300k on this one, so keeping it until April and avoiding capital gains sounds like the best approach.

Originally posted by @Colleen F.:

@Robyn Smyles it probably doesn't matter because it is taxed as ordinary income so it drives your total income up.  Your husband make 50k , you make 50k minus 30k expenses, you are at 80k. Your flip is $125k profit, your total income is 205k and are taxed at that rate.  You are also subject to Alternative minimum taxes so if the AMT is more you pay that.  So ask a CPA but I would bet it is a big difference if you do this as an ordinary income vs long term gains. 

That’s a great breakdown!  It really helps to see the big picture.  Thank you for taking the time to share your wisdom.  

We look to profit 250-300k on this one, so keeping it until April ( the 2 year mark) and avoiding capital gains sounds like the best approach. 

My husband and I are new to this community but we have been buying, renovating, and selling homes for 28 years.  We buy, live in it and then sell.
We literally do it all! The find, the design, the demo ( I love demo), the building, and sourcing of materials at deep discount ( love this more). 

We are in the final days of a whole home remodel.  The market is great and we are considering selling! But we always have held it for atleast 2 years to avoid capital gains. 
we average 125-250k profit on each flip.

We are contemplating selling but need to know what income is used to calculate the capital gains tax on the profit ( less the deductibles ) 

Since my husband is a w-2 and I a 1099, is it calculated on the combined income before my write offs or is it on the adjusted gross income ? 

April will be 2 years so it might make sense to wait? 

Would love to get clarity on this!