Capital Gains-need help!
I entered into a sales contract in 3/00 (put $2500 down and more later) to buy a condo and held it until 7/02 when the condo was finally built (slow builder) and in the mean time it appreciated. I bought the condo in 7/02 and decided to flip it and after closing on it, a few days later sold it. It has been suggested to me since I held the contract for over a year, perhaps it could be considered a capital asset and taxed as a long term capital gain instead of being taxed as ordinary income. Does anyone have any experience with this type of situation?
Your date of purchase and your date of sale determine the holding period for your capital gains calculations. Contract date is disregarded here, so it appears that you will report a short term capital gain.