Tax Question
Hopefully someone can give me some helpful info. My main concern is with the tax implications.
We just purchased a SFR, actually a Manufactured Double Wide on a Basement and 1 acre of land. The property is being purchased just in my name alone. My father is actually buying it for my sister and I to split though. The plan initially was to rent it out because the cost of the home was not too much and figured it would rent for around the 900-1000 mark. Closing is in a few weeks but now they are thinking it should just be rehabbed and then sold.
The plan was to add my sister on the title after closing since she lives 6 hrs away. Now they think it is a better idea to rehab and sell instead of using it as a rental. My concern is with taxes. My understanding is that the gain could be a decent amount and as such if it is rehabbed and sold then I would have to pay taxes on the gain. By doing so it will most likely move me up to the next tax bracket as well. Plus then I would have to split the profit with my sister as well. I think there is issues there as well if I was to give her x amount of money too. How should things be structured so I can get this deal done? I was kind of a quick decision kind of thing so nothing was thought out at least from the other parties. I don't plan on this being a long term partner deal either. If it was going to be a buy and hold I would consider things different.
Suggestions...
Regards