How are the house flippers featured on this show dealing with the (apparent) necessity of capitol gains taxes? Do the dollar numbers for the flippers' profits stated on the show reflect the subtraction of cap gains taxes? Are these people "getting out of" paying them somehow? If so, how? And why doesn't this show speak more openly and informatively re cap gains issue because these taxes would seem to affect house flippers in a HUGE way.

First let me say that the "projected profit" numbers are overstated. In addition to capital gains taxes, they don't take into account real estate commissions or closing costs. Not including the capital gains taxes, these things can be as much as 10% of the purchase price.

It is also possible to legally delay paying capital gains taxes on investment property by doing a section 1031 exchange. In essence the capital gain from the property sold is transferred into a newly acquired property of like kind. The purchase and sale must meet strict rules and be handled through an intermediary. The seller cannot directly receive any proceeds. I suspect this is what smart flippers are doing with help from their accountants or an attorney.

If you are a long term investor you can keep rolling your gains into new properties and avoid capital gain taxes forever because the basis of the property is "stepped up" to its market value as of the owner's date of death.

Be sure to find out the specifics on the 1031 exchange. I'm not sure if it changes by state, but I'm in Minnesota and I know at least here you have to designate the next property within 45 days and actually purchase it within 180 days of putting your money in a 1031 exchange. I have also heard that you have to own a property for a year in order to do a 1031 exchange, so fast flippers will not be able to get around those much hated taxes!

Keep the property for 'a year' for a 1031 exchange? That doesn't sound right. If you kept the property for a year, you wouldn't have short term capital gains to begin with!

1031 FEDERAL tax code, look it up with the IRS