How soon can I sell after purchase of a home? And avoid taxes.

3 Replies

You don't.  If your intent is to fix and flip the net profit is taxed as ordinary income.  Houses acquired for fix and flipping (or just flipping, if there's no fixing) are treated as inventory, same as a shoe store.  You pay federal, state, and local income taxes as well as self employment taxes.

@Christopher Stromberg , You buy the property with the intent of holding it for productive investment use.  Then when you sell in a year you can do a 1031 exchange and defer the taxes.

Or you could move into it and after two years of living in it you would get the first $250K ($500K if married) of profit tax free.  

Other than that @Jon Holdman nails it.  Uncle Sam is your silent partner.  And he's not a patient one.

Originally posted by @Dave Foster :

@Christopher Stromberg , You buy the property with the intent of holding it for productive investment use.  Then when you sell in a year you can do a 1031 exchange and defer the taxes.

Or you could move into it and after two years of living in it you would get the first $250K ($500K if married) of profit tax free.  

Other than that @Jon Holdman nails it.  Uncle Sam is your silent partner.  And he's not a patient one.

 Exactly! In order to avoid taxes without holding it long-term, it still needs to appear that that is your intention. I would suggest finding a renter for a year and then selling the home.