Tax Questions about Flipping

[Brie Schmidt]

I wanted some feed back to make sure I am analyzing this correctly. We are considering doing a JV flip and would reinvest funds. I wanted to make sure I am looking at the tax implications correctly. This would be in addition to our W-2 income which basically puts us at the top end of the 25% tax bracket.

Both companies return $1.50 for every dollar spent

Company A does 3-6 month flips so I estimate they would do 3 in 1 year which would make it self employment tax

Company B rehabs and rents and then sells after 1 year. Half way through they would refi to pull out investor funds and reinvest in another project - so 2 a year

Am I doing this right?

[Matt Devincenzo]

Originally posted by @Eric M.:

"Rolling over the money" would make no difference tax wise unless you were doing 1031 exchanges from property to property. I have no experience with the feasibility of using 1031's in a flip scenario.

1031's can not be done on flips. It has to be an investment property, flips are considered business inventory not investments.