My_question_is: Canadian-specific Subject: Flipping Houses Expert: taxman at centa.com Date: Thursday April 20, 2006 Time: 10:08 PM -0700 QUESTION: I read with great interest the information you provided regarding capital gains, however, I would like some more specifics on "flipping houses". My husband and I have owned our home for 6 years. We are currently in the process of selling our business and we would like to fix and sell houses as our next project. Could you please tell me if this is a worthwhile venture? This would be my husband's full-time job and we intend to fix and re-sell within a one to two month time frame. I appreciate your wisdom! Cheers, ------------------------------------------------- david ingram replies: The biggest problem with flipping house is finding a large enough spatula. However, done well, you can make a good living. In a down market you can lose your shirt and pants as well. If you make money, it is straight income, if you lose it is a straight loss, no capital gains treatment when renovating houses. It was virtually impossible to lose money as a renovator in the last four years. However, that market is now turning in different places all over North America. Whether the Olympics is capable of keeping the BC market up is a matter of conjecture. The economy in Alberta and BC is so strong that one would think so, However so many people bought with 3.5% mortgages which are coming due at 5 and 6% that it is bound to slow the market as people are forced to sell who do not qualify to renew. Be careful with what you buy and don't get carried away with the exuberance of your realtor. Buy homes with the right things wrong. Buy homes that need cosmetic work where you can move a shrub, install a new chandelier and paint. Stay away from anything that requires structural or foundation work unless you or your husband is a structural engineer. It is almost impossible to find serious trades to do any work for you at the moment when there is a serious problem. ============ David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) email to taxman at centa.com <mailto:taxman at centa.com> www.centa.com <http://www.centa.com/> www.david-ingram.com <http://www.david-ingram.com/> Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com <http://www.centa.com> . If you forward this message, this disclaimer must be included." Be ALERT, the world needs more "lerts" David Ingram specializes in giving expert income tax and immigration help to American and Canadian citizens living out of their home countries from Zimbabwe to Saudi Arabia to Mexico to China or Chile - Cross border, Non-resident - dual citizen - out of country investments are all handled with competence and authority.
