3 ms·

This is A Good Thing and by design. Isn't encouraging investment the whole point?

• triceratops 5y ago
  This particular loophole seems like it was meant to shield homeowners who are moving house. Not for encouraging investment.
  • jmvoodoo 5y ago
    It only applies to investment property. If you own your home the first 250-500k of capital gains is exempt depending on your filing status. 1031 exchanges are a decent amount of work and have some additional requirements (it's not really for house flipping). They are also a tax deferral strategy. The tax eventually comes due.
    • lotsofpulp 5y ago
      > They are also a tax deferral strategy. Carved out only for real estate investors. I don’t see why it shouldn’t either apply to everyone, or no one.
  • toast0 5y ago
    1031 is not for properties the owner lives in. For owner occupied properties, there is a $250k per taxpayer exemption on gain if requirements are met. As I understand it, it's possible to use both rules on the same property, but it takes many years and specific facts.
• genericone 5y ago
  Investment or Speculation?
  • thelean12 5y ago
    Flipping houses usually means buying a house -> making improvements to the house -> selling it for a profit. I wouldn't call that "speculation". Speculation in this case could just be buying a house and trying to sell it for a profit later without improving the property.
    • throwawayboise 5y ago
      Or building a house without a buyer already under contract, and trying to sell it for a profit.