Real Estate Investment Vs. Inventory
Hello Fellow Well Endowed Pocket Havers,
Background: Recently purchased a single family home in Philadelphia as an investment hold property in cash. Decided after buying the house it would be worth selling due to comps in the area. I'm now in contract to sell the property. I had the intention of using a 1031 exchange after selling this house.
Numbers:
Purchase Price - $40,500
Renovation Cost - $40,000
Sale Amount - $116,500
Time Frame - Under 6 months
After days of research and countless contradicting conclusions, it has come to my attention that because this is a short term sale, the property may be viewed as Inventory as opposed to an Investment, which would then render it ineligible for a 1031. The IRS profiles some Real Estate Developers such as myself to be "Dealers" (ones who "flip houses," which in no way, shape or form am I admitting to be).
OTHER KEY INFORMATION: This was my first property ever purchased, I have since bought a second with the intention to sell it.
Please god, if any of you, have any insight on this matter specifically for Philadelphia or Pennsylvania. Bestow your knowledge upon me. Or if you think you can be of help in anyway, that is also truly appreciated.
Best Regards,
Non Dealer