Profit Question
I am just about to begin my first rehab property. We plan to sell the property and make at least 75K. Question is what do we do with the profit? If we just keep it we'll get hit hard with taxes. My understanding is that it will go on our taxes as income, but we are not sure if we will be able to find another investment property in the time frame. Can we put 100% of the money into a vacation property? What do others do with the profits they make?
even if you buy another property, so still have made a profit on the 1st rehab.
Unless you do something like a 1031 exchange.
Just find and keep every single receipt for the rehab to minimize the gain.
Congrats on a very nice sounding profit!! If you are trying to avoid taxes as much as possible a 1031 exchange would be a good idea, depending upon your goals. If you can give us an idea of what investing you plan on doing after this property and how much you want to keep to pay bills, take a vacation, etc. there are plenty of people on this site that can offer good advice. 8-)