Navigate complex house flipping taxes with confidence

The popularity of house flipping has increased dramatically in recent years, so you’re likely to have clients who are interested in this activity, or who are already doing so.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.   

Q: How do you know who is a qualified intermediary?

A: A qualified intermediary is a person who meets the requirements under specific sections of the U.S. Internal Revenue Code (IRC) to perform certain activities.

Q: What is the difference between a flipper and a rehabber?

A: Flippers may or may not make improvements to a property before selling it, whereas rehabbers always make improvements before selling.

Q: Can investors depreciate their property?

A: No, investors cannot depreciate their property unless it is placed in service as a rental property.

Q: For an installment sale, should Form 6252, Installment Sale Income, be reported when the sale occurs or in the tax year when the first payment is collected?

A: Form 6252, Installment Sale Income, should be filed in the year the sale occurs.

To learn more about preparing taxes for house flippers, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial.