Taxable income

If I buy and rehab a property for $70k using cash, then do a cash-out refi at $100k, is the $30k counted as taxable income? This would all be done within 6 months.

You would be taxed on the capital gain when you sell. Taking out a mortgage is not a taxable event.

Capital gains don’t apply to rehab flipping. If this is a buy and hold, yes capital gains would apply. If this is a flip, the 30k would be taxable income.


Your taxable profit is determined by your cost basis and your sale price. Refinancing is not a taxable event. The cash out from your refinance is not taxable income.