These questions can be difficult to answer but are necessary in determining if you even qualify for the principal residence exemption. If you are thinking of getting into the house flipping business, we strongly suggest booking an appointment to come and talk to us about the tax implications not to mention how to structure your business from a financial standpoint. We can help with all the processes along the way from creating a corporation, setting up your books, your bookkeeping, accounts payable, payroll (if needed), and taxes. Keep this important tax fact in mind – All principal residence dispositions, whether tax exempt or not, must be reported on your personal tax return.