Florida Condo Conversion Tax Question
I am currently converting a 14 unit rental property into 14 condominiums. We plan to begin selling units within 6 months. We have owned the property less than 1 year. Question: if we sell 9 units before we own the propety for 1 year, is there any way of avoiding declaring the profit as current income?
Thanks for your help.
Do you mean ordinary income? Anything held less than one year will be taxed at ordinary rates. I would be more concerned that you will be classified as a dealer and would also be subject to self-employment taxes unless you can prove you purchased this as rental property but then circumstances changed. You may want to visit a CPA to discuss dealer status.
Thanks Matty. I just got an email from my accountant confirming what you just said. I need to quit my day job.
I need to quit my day job, too!
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