Capital Gain/Taxes On Investment Refinance
Bought property this summer for low price and rehabbed for low price. Will close on 90% investment refi, will net 30k after all expenses are paid. Can I be taxed on the 30k that I pocket.
thanks.
Nope, not now.
Taxes kick in when you sell. Better keep good receipts on the rehab for later. Are you making it a rental?
yes ce it is rented @ 1.5k w/ purchase option for next summer, W/ 100% Ltv financing I will net @ 50k at sale. So then what do I do about the 80k I will have received?
Did you get 100% or 90% financing; I'm confused.
Is this your first rental?
If so, do you have an accountant or do you intend to do your own taxes?
That sounds like a successful rehab!
Yes, this is my first rental/rehab project completely on my own. I have done many others with investors/rehabbers/wholesalers, but not on my own. I do have an accountant but would prefer to know for myself. The 100% financing I was refering to is for the tenant who will buying the home from me next summer. I myself paid cash for the ss purchase and rehab work (did roof,doors,ceramic/laminate floors,carpet and painting for <10k!)
I am doing a no title seasoning n/o/o investment refi @90% Ltv, this is where the initial 30k will come from. Yes would agree that this has been a successful project and I am frantically looking for more opportunities similar to this one.
What else should I know (about tax, etc)
before closing on the next deal?
thanks
I agree that the $30K from your refinance is not taxable income.
However, the interest you are paying on the cash out portion of your refinance loan might not be deductible. What did you do with the cash out money from your refinance?
New Kid,
Have'nt closed yet! But Iam planning on buying another property to rehab/refi and use the funds to purchase commercial multi-family apartment! Any suggestions?
[addsig]
I'm just curious... how long did you wait to get your 90% refi? I just started investing this year and I purchased three properties this summer. I purchased them for a very low price and rehabbed for a low price, but the best I've been able to get is 70% refi on them. One I refi'd after a month and the other after about 4 months. My broker said its a combination of the no seasoning & credit score. My middle score is around 680. I was wondering if this is usually the case when you refi before 6 months or should I find a new broker?
Thanks