Tax planning involves some thinking prior to acting - in this case, the sale is the event that triggered gains that then trigger taxes; so before the sale, you should have consulted CPA / tax planner to determine options to minimize tax impact.Of course, since you say you were flipping, a 1031 exchange never was an option.

Manuel Acuna - please re-read the sticky posts in the landlord forum until you gain an UNDERSTANDING of the meaning behind the "50% rule"; post questions in those threads if you don't get it.

If not, I would suggest looking into the tax benefits of buying a home, including tax free gain.

I know forming an LLC is the way to go and what we would end up doing but I want to gain a better understanding of the logistics of a deal like this and if anybody has structured any similar deals.Keep in mind I would also like to make (and keep) my investor happy as this is my first flip!

I don't really have any interest in investing in single family homes and I know exactly what I want to gain from this experience.

heather, so sorry this happened to you. this was very unselfish of you to post your unfortunate loss. it wakes up investors eyes & maybe even scare some away.having reserves is very important. a lot of peeps will just blow the $ every month to cover their personal spending. throughout this post you have definitely listed the realities of landlording. maybe you could start a LL reality show & gain back your loss that way?

Fellow Biggerpocketers (Yes it's a word..Lol)I've been reading here on Bigger Pockets for the past 2 years and have gained some valuable knowledge along with getting some much needed advice on a couple of investments that I'm sure I had no business even looking at.

@Bill Gulley, that would mean that it's the greatest job gain since Ronald Reagan was in office.

Army and when we went to Fort Irwin for a 30 day military exercise - individuals usually gained about 10 pounds.

Seems to me the short term capital gains tax would eat up a large portion of your profits.