Posted by Bill on May 17, 1999 at 22:31:39:
After listening to the advice of many nice people, I am almost convinced that I should flip, while I accumulate enough capital to be taken seriously. I was told to be able to put atleast 25, but preferably 50 per cent, into properties that I want to hold. I was also advised to finance for 15 years so I could begin retirement with a nice income with a small number of properties.
I do plan to incorporate so I can protect my investor status. Otherwise, if I flip contracts or birddog or do MH, I will lose the depreciation expense deduction that I had hoped to use to protect some of my earnings and help me accumulate more capital.
As I see it now, if I pay approximately 13% for self-employment and being in the 28% bracket, it looks to me like I would be sending Uncle Sugar nearly half of my net. I love my country, but that seems a bit extreme. I haven’t quite figured the corporate form, so I don’t know if I’ll be hit for taxes on that before I lose 41% of the remainder.
If I do acquire property towards the end of the year, it would seem that I would be limited in the amount of depreciation I can claim.
I am not trying to put the cart before the horse, but my accounting training from the far distant past still haunts me. I must try to have a business plan that includes some tax strategies.
Thanks in advance to everyone for the great ideas I know you will provide.