capital gain for RE in S corp?
I have a small S corp which I own 100%. I have been building small spec houses in the past so the purpose of my corp is listed as Construction / RE investment.
Since the market went south I have bought 3 foreclosures ( houses and lots). I just sold the first one in 08 and have a net after purchase and repairs of about 25K.
My question is this...I owned the property for > 12 months so I thought I would get some sort of Capital Gains treatment and therefore reduced tax liability. My tax advisor says the 25K is ordinary income because it is my business to buy / repair / sell houses.
I guess I just want to confirm the opinion. Any ideas or comments would be appreciated.