The flip tax is not directly deductible as a tax on your income tax return, but it is treated as a selling expense that reduces your capital gain. It gets subtracted from your net sale price when calculating taxable gain - so while you do not deduct it as a line item, it effectively reduces the capital gains tax you owe. Your CPA should include it in the selling expenses portion of your gain calculation.
This article provides general educational information only. It is not legal, tax, financial, insurance, compliance, housing, brokerage, or professional advice. Rules, tax rates, obligations, enforcement practices, and market conditions vary by property, building, contract, municipality, and jurisdiction, and they change. Sellers should consult a qualified attorney, CPA, or other appropriate professional before making decisions based on their specific situation.
From the seller playbook: Flip Tax Structures in Co-ops
This is general information, not legal, tax or accounting advice. Every situation is different. Talk to a licensed attorney, accountant or tax professional before you act.
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