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I’m not an expert, but couldn’t you put the $100k in a 1031 exchange?
Coach
Hold a year and sell through 1031 exchange to defer your tax from gains. Buy another piece of land or a rental that cash flows.
In general anything under a year is standard income
That’s helpful. Thank you
Subject Expert
You should talk to a tax professional. There are some other elements that will play into your calculation (time held, how the loans are structured, etc.)
I agree with trying to hold at least a year to get out of short term gains land, then 1031 exchange into the next property
Subject Expert
Short term capital gains are taxed at ordinary tax rates.
Thanks for the post. Good article though very complex subject. My take-away is, to be safe, hold for one year after completion of construction (CO) and you should be safe.
Less than 1 year = taxes like regular income
More than 1 year= capital gains tax (better rates)
If you 1031 exchange you can put the proceeds into another house and defer the taxes.
Also, if you live in it for 2 years you won’t have to pay any taxes on it if you sell shortly after.