It would be wise to ask your CPA the capital gains exposure once this strategy is being executed.

Originally posted by Tony Bc: We (husband and wife filing jointly) are looking for a CPA.

Hey @Alicia Howard, as far as I know @John Underwood is correct.I would get with your CPA and go over this as you want to be sure.

Maintain detailed records to substantiate deductions for materials, labor, and expenses, which can significantly reduce taxable income.While an S-Corp provides tax savings, it also requires payroll management and compliance with formalities, making it essential to stay organized or consult a tax professional for ongoing compliance.This post does not create a CPA-Client relationship.

As far as LLC structures and tax strategies you should find a CPA who has experience with real estate and small business.  

Working with a CPA or financial planner can help optimize tax strategies and ensure the best approach for your goals.This post does not create a CPA-Client relationship.

Avoid C-Corps, as they incur double taxation.Use LLCs for rentals and consider an S-Corp election for flips if income justifies the additional complexity.This post does not create a CPA-Client relationship.

Then rent the bigger home out using a property manager, allowing her to possibly cash flow and maintain that asset and let it continue to grow in value.Encourage her to consult with a CPA or tax attorney to explore the best strategy tailored to her situation.

Nothing in this post should be construed as, or relied upon, as legal advice or as creating a CPA-client relationship.]

Hey @Nick Gallon Martin, I recommend speaking to a Tax Planner/CPA, @Jeff Nash would be a great resource for you.