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Need advice from one who seriously knows Taxes regarding Real Estate Investments?
Bought a "fixer upper" house (SC, USA) in 2008 and live in it now. I know I have to wait 2 yrs to sell if I don't want to pay taxes at all. I'd like to sell it now though.
If it is my 'personal" residence and I sell now, then I cannot deduct repairs etc..maybe only "improvements" but not paint or repairs for sure.
Now I live in a vacation spot, so if I go on my own vacation and rent this out for a week or two in Nov. & Dec. Does that then turn my 'residence' into an 'investment' property so I can then deduct those things so I can pay less tax on my profit?
We knew we would flip it but really thought we'd stay 2 years so we got a normal homeowner loan, not an investment loan. We have to prove to the IRS that we meant it as an investment to deduct these things. We did mean it, but since we did not get an investment loan I think the only way to go is to actually rent it out. But I only want to do that if it would definitely work.. Or would that just make it a 2nd home?
Would this work? Thanks for your expertise!
Ok, so I found out I can't do that.. how can I prove I meant to flip it? I guess the tax law is all about "intent." I need to sell it now, not after 2 years, so what CAN I do to prove intent?
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| By
Kristy K |
Posted on
10/22/09 Total Answers
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