This may belong in the tax section, but I figured it might get more responses here. I have some time and money on my hands and have recently seen some homes that need a decent amount of reno work that are in the right price range.
To determine whether I think it is worthwhile, I would like to learn more RE how the entire investment would be taxed. I say "slow" flip since this is a first for me, and I am able to take the time.....and, I'd like LT cap gains treatment.
So, assuming:
- buy home (have enough cash to buy and do reno, but am looking into financing options as well)
- do reno
- sell after a year
how are the following treated:
- property tax while owned
- interest expense if financed
- insurance while owned
- improvements vs. maintenance.........all work would be improvements, I think, since it is returning the prop to livable status.
- utilities while owned (power and water.....need to be on to do work)
- other costs I am forgetting right now.
I know how these things are handled if it were my primary home, but, given it would be treated as an investment, I know it is different.