PreConstruction In Fort Myers About To Close On
I signed a contract over a year ago in Moody River Estates in Fort Myers. The condo has moved from 200K to 400K and will be completed this Dec. I put 10K down when the contract was originally signed. When I close on it and take possession, if I choose to sell immediately will I pay short term gains or long term? I have read conflicting posts on here re this. Some have said I began holding the asset at contract date and since that is over a year i pay short term. Others have said the IRS classifies the property as a new asset once it moves from contract to getting the CO and the holding period starts over. Can anyone give me exact clarification on this?
Second ? - Does anyone know of any great developments coming up in Charlotte or Lee County that requires less than 20% down? Most of the developers are really tightening their restrictions. I am looking for something that completion date is 12-24 mos out.
I would contact your CPA directly and get their input. It is my understanding the IRS considers the clock to start ticking once you have actual title to the property and not from when you contract to purchase the property. Again, contact your CPA.
As another option, if this is an investment property, you can look at doing a 1031 exchange but even then the IRS typically wants to see you hold the property for at least 6 months before exchanging.