Posted by dealmaker on March 21, 2007 at 15:57:44:
I think the reason for your confusion is a LOT of people still remember the old (I think it went away in '86!) rule on selling your residence. Back then, as long as you “rolled” the “profit” into your new residence there was no taxable gain. Today the rule is $250K (single filer) $500K (married filing jointly) of your gain is tax free on your RESIDENCE.
However, you’re talking about “investment” property. If the property was “held for investment” (I’m not sure if flips qualify-check with your CPA) then you can do a 1031 exchange. 1031 refers to the section of the Internal Revenue Code that covers these.
Best best is to read that section at irs.gov to get familiar. Or just google “1031” and read the FAQs in any of the 6 million “facilitators” who have links.
Congratulations on the substantial profit. And remember paying taxes is the sign of a successful investor. Just don’t pay too much.