His explanation is that the profit will be taxed as ordinary income irrespective of the desire to use 1031...is this accurate?

Income from flipping is ordinary income, not short term cap gains.

If she takes out a distribution from her retirement account prior to normal retirement age the consequences would be ordinary income taxes plus penalties.

Don't flip, hold for a reasonable time and do a 1031 tax deferred exchangeIt is ordinary income.... so no real estate benefits other than cashTake the profits from your flip and invest that money into something that will compensate you for the loss in taxes you will have to reportDo more flips, pay your tax and enjoy your wealthHave fun, spend some of that money on yourself.....

Thanks Brit and Steve.

At the same time, you can have an entirely separate account that solely focuses on long term holdings and reap the benefit of a lower tax rate categorized as capital gains as opposed to ordinary income. 

- Repairs to rental property (provided the repairs are ordinary, necessary, and reasonable in amount) are fully deductible in the year in which they are incurred.- Travel (local and long distance) tax deduction whenever one drives anywhere for their rental or business activity.

The stereotypical wary Brit animal expert is fascinated by the creatures as they poke, prod and throw themselves into the fence and wall.

Hi @Keeya WangJones, well this is my little story 2004( I was to young had just gotten my real estate license but what I remember, I did 2 sales only that year, but rates did go up a little and that's why my 3rd property did go threw ) 2008( I was young Associate at the Investment firm of my dreams, so my job was to analyze trades, purchase of large multifamily complexes, what I notice that the uncertainty of the election does drive into doing out of comfort moves, but 2008 election was during a time of crisis in the real estate world, but what I gather of the residential market that year was if you had money you bought property because it will go up couldn't go any higher and election did affect at some point the election ) 2012( I was more establish in the firm and was head investment analyst learned a lot since last election, and this was a different, that drove inventory low, nobody was selling investor were waiting with check and pen for another dip in the recovery economy but didn't happen just affected the options out there and the desire of people to sell common ordinary home buyer ) 2016( What my firm and I been noticing this election is a chain reaction, large hedge fund corporations are not making the move to invest there own capital, midsize and family offices are buying up safe investments and rentals with lease signed tenants, why uncertainty, and the average dude is buying like crazy, what he can get his hands one to make quick cash, will this drive or economy to a collapse again, some say yes some say no, you be the judge, but what everybody agrees that there is more money out there now so more money to loose, if I was you If there is a property that you love buy it park that money, somewhere cause whatever happens in election your money is safer in a home then in the bank, plus your home creates equity, just buy in a good area here in San Diego, we have the coastal California economy where you buy it ill go up in price, so just go out there and find the right home, I know its hard cause options are so few in the area now.  

You also may be transferring income that is passive rental income to active ordinary income that may be subject to self-employment tax.