Taxes on real estate

[David from Boston]

I purchased a piece of land with 7 garages in June -2002.
In September -2003, I razed the garages and built a six unit
building I will be selling in May 2004 as condominiums. I
will occupy one condiminium as my residence for two years.
What are my tax consequences for capital gains and/or
ordinary income for the remaining five units.

thank you

 

[MTW]

What are my tax consequences for capital gains and/or
ordinary income for the remaining five units.

Sounds to me like you would be considered to be a
"developer" or "dealer" in real estate and, accordingly,
your income would be "ordinary" rather than "capital gain."

MTW