My question is whats better: Sell one year early and pay the roughly 30k in capital gains tax or sit back and wait a year and pocket the 30K?
We are anxious to move on to our next investment, but my tight fistness doesn't want to lose out on 30K.
I am set to close on our first live in flip in less than 2 weeks. Our plan is to do all the rehab asap so that we can refinance and pull out money to hopefully invest in the next deal.
I would love to know what your deal looks like and how it plays out for you
If you can afford to throw 30k to the US govt then you must be very rich or very good at what you do.... The whole point of a live in flip is to avoid the taxes. 30k was almost my full salary for the year when I first started teaching.
You could qualify for 50% of the gain excluded still if you meet one of the IRS' 121 gain exclusion.
any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the Secretary.
Also- It's important to keep in mind that you can only utilize a 121 exclusion once every 2 years.
So if you're planning to continue doing live in fix/flips you want to be aware of that as well.
The new qualified opportunity zones for investing SHOULD qualify for primary home investing. At this point this is how the regs on that are being interpreted.
Basically- there may be a few options. Feel free to PM me with any questions