Don't Flip Out, Tax Implications of House Flipping ON DEMAND

Overview

You have seen house flipping shows on television, if not, you have probably heard of people flipping homes for a profit. But what you have not seen discussed on these TV shows or at the local coffee shop, is what are the tax implication of flipping a dwelling. In general, flipping is a type of real estate investment strategy in which an investor purchases a property at a low price not to use, but with the intention of quickly selling it for a profit. Where do the transactions go? Will it be Schedule C, Schedule E, Schedule B, Form 8949 and Schedule D, or a combination of these forms? Will expenses and or renovations be capitalized or expensed in the current year? What was your client’s intent upon purchasing the property? Is your client an investor or dealer? Can you utilize IRC Section 1031, Like-kind exchange, related to the flipped home? This real estate accounting course will examine these questions, giving professionals the knowledge to appropriately account for house flipping’s unique tax implications.

Highlights

The tax implication of flipping a dwelling.

Prerequisites

None.

Designed For

CPAs.

Objectives

Explore what is a trade or business under IRC section 162. Examine the distinction between a dealer and an investor. Analysis of case law. Investigate what forms do we use for the flipping transactions. Examine if the number of transactions each year makes a difference on how a sale is treated. Assess nature and intent of taxpayer. Review other factors that affect related tax implications.

Preparation

None.

Notice

None.