When flipping condos a lot of people ignore the tax laws and don’t take the time to get educated on how taxes play a big role when flipping condos. When this happens they’re often shocked and left scrambling when the receive a huge tax bill because certain procedures and laws were not followed or ignored. Taxes will most certainly need to be paid when flipping condos especially if it’s not your principle residence.
Some people make the mistake of trying to cheat the tax man and this can have really bad consequences. Taxes on flipping a condo will be determined depending on if it’s a capital property, principle residence, or if you are actually in the business of flipping condos. Certain criteria are looked at in order to properly determine which classification applies to you.
So many people are getting huge tax bills that sometime are more then what they actually made in profit because of fines, penalties, and interest. So before you decide to get in the business of flipping condos sit down with a good accountant and tax lawyer to get some advice. This will help you better prepare when doing your taxes otherwise you could be in for a surprise.
Watch this episode where real estate tax lawyer Eldad Gerb of Devry Smith Frank will discuss taxes on flipping a condo.
For more information on real estate taxes, or if you’re looking for a tax lawyer contact:
Eldad Gerb, B.B.A., J.D.
Tax Lawyer / Devry Smith Frank LLP
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