Fix & Flip Gains

[Andrew Terry]

Starting out here. Looking at a few properties for the first step into this. Looking for some clarity on the capital gains. I get they reduce after a year but would you avoid cap gains if you put the gains into another property or investment? 

[Randy Rodenhouse]

Short term capital gains is your ordinary income tax rate and long-term capital gains where you hold the property a year or longer is considered long-term capital gains is in as taxed a lower rate.  The long-term capital gains tax rates are 0 percent, 15 percent and 20 percent, depending on your income and status (single, married, etc).  For example, in 2024 if married filing jointly see table below.

You could also do a 1031 exchange to avoid the taxes completely but have to invest all money into a like kind property of higher value. 

Married filing jointly

0% up to $94,050,

15% for $94,051 – $583,750,

20% for over $583k