How does the IRS treat the gains from Flipping off mulitiple foreclosure properties bought and sold within a short period of time?
The tax court has ruled that any gains that result from from actively flipping foreclosure properties that are bought and sold within a short perid of time, (i.e. less than 6 months) are deemed to be ordinary income and thus cannot be used to offset any capital losses!
The tax court "identified these taxpayers as dealers in real estate."
Source: Tax Court Memo-2010-261