Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here
Tax, SDIRAs & Cost Segregation
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 5 years ago on . Most recent reply

User Stats

74
Posts
35
Votes
Anthony Porembski
  • Rental Property Investor
  • Cleveland Heights
35
Votes |
74
Posts

Loopholes for cap gains on a flip?

Anthony Porembski
  • Rental Property Investor
  • Cleveland Heights
Posted

Hello people! I was wondering if there are any ways to reduce your hit on capital gains from the sale of a flip.

Can you roll profits into a down payment on a new SFR property without getting hit or are there any other clever ways? Not that I'm opposed to paying good old Uncle Sam, I'm just curious. Thank you 🙏🏻 🙏🏻🙏🏻

Most Popular Reply

User Stats

3,835
Posts
3,148
Votes
Ashish Acharya
Tax & Financial Services
Pro Member
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
3,148
Votes |
3,835
Posts
Ashish Acharya
Tax & Financial Services
Pro Member
#2 Tax, SDIRAs & Cost Segregation Contributor
  • CPA, CFP®, PFS
  • Florida
Replied
Originally posted by @Anthony Porembski:

Hello people! I was wondering if there are any ways to reduce your hit on capital gains from the sale of a flip.

Can you roll profits into a down payment on a new SFR property without getting hit or are there any other clever ways? Not that I'm opposed to paying good old Uncle Sam, I'm just curious. Thank you 🙏🏻 🙏🏻🙏🏻

 No matter how you use the profit from the flip (downpayment, buy another investment or any other business spending), you still going to have to pay taxes on the profit that is already been earned. 

As lance mentioned above, there are few ways if you funnel your money to retirement plans, you can save up to almost 50-60k from tax. But the money will stay in your 401k other qualified plans, and cannot be used for other deal.  

Also, the flip profit is taxed as ordinary income with subject to selfemployment taxes, not as cap gain. 

business profile image
Investor Friendly CPA®
5.0 stars
215 Reviews

Loading replies...