Discussion:Sale of condominium...capital or ordinary

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Discussion Forum Index --> Tax Questions --> Sale of condominium...capital or ordinary

Bubupig (talk|edits) said:

6 November 2006
take an example: the construction company is an LLC(in NY), and constructs condominiums which will be sold after it's done. how to report the tax if it has a gain? thanks!

JR1 (talk|edits) said:

November 6, 2006
Sounds like it's in the business of doing this, and if so, ordinary income.

Bubupig (talk|edits) said:

6 November 2006
are the dondominiums be treated as 1231 property?

Foxttron (talk|edits) said:

6 November 2006
NO, they are inventory held for sale. Ordianry Income.

Bubupig (talk|edits) said:

6 November 2006
how about if it's a real estate developer (LLC) that assign the contract to construction contractor, then sale of the condo? some article said "...all profits form the sale of the project would generally be subject to capital gains tax treatment instead of ordinary income..."

JR1 (talk|edits) said:

November 6, 2006
You've got some homework to do since this is a highly litigated area. Sec. 1221 is the one you're after...

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