1031 exchange questions when flipping a home

[Landon B.]

Hello,

I flipped a home under my LLC over the past 5 months. I then took proceeds/profit made from the flip and invested it into another flip home. Would this qualify for a 1031 exchange and is there anything I should do to make sure that I can classify it this way? I assume if so, all taxes/capital gains from the first flip would roll over into the next and not require me to pay taxes?

[Mindy Jensen]

@Landon B., flipping a house does not qualify for 1031 exchanges. Also, if you took possession of the money from the sale, it would not qualify for the 1031. There are a lot of rules surrounding the 1031 Exchange. One of the 1031 peeps will surely chime in on this thread, too.

The money you made from this flip would be counted as regular business income, and taxed at your current income rate. Make sure to save receipts for all work done on the house, so you're not paying taxes on that amount.