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PDtax, CPA firm owner
Category: Capital Gains and Losses
Satisfied Customers: 4678
Experience:  Tax professional and business consultant for 34 years
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I flipped a house 24 Nov., 2015 and bought another house to

Customer Question

I flipped a house 24 Nov., 2015 and bought another house to flip on 23 Mar., 2016. May I roll over profit from 2015 to 2016 year?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'mCustomer I'll assist.

Expert:  PDtax replied 1 year ago.

It sounds like you are a flipper, and the house you sold was a flip. Since you sold to a third party, the gain must be reported in 2015.

Expert:  PDtax replied 1 year ago.

The exchange you are implying, there old house for the new one, defers tax in certain situations. It is called a 1031, or tax deferred, exchange. It applies to business property that typically had to be owned for 2+ years. It also generally had to be depreciable. You're flip does not qualify.

Your flip house is considered inventory, and thus the 1031 rules don't apply.

You would have to place the flip into rental service, and rent it out for two years, to execute a 1031 exchange. There are other technical requirements too.

Sorry the law can't be applied to your situation. Please rate my assistance with positive feedback to give site management your opinion of my work. I'mCustomer