Posted by Rich[FL] on July 25, 2003 at 14:17:00:
If you get “tagged” as self-employed, won’t you also owe the 15% self-employment tax on top of the federal (and state) taxes?
That’s why it’s often advisable to do rehabs/flips inside some type of corporate structure to at least avoid the self-employment tax issues.
Rich
Flipping properties & taxes - Posted by Kevin
Posted by Kevin on July 24, 2003 at 11:43:55:
Hi all, I am new to REI and have a few questions in regards to flipping properties. I have read numerous books that break down the financials of an investment property, including deductions for depreciation & interest payments. In regards to flipping properties I do believe that depreciation is not deductible but what about the interest payments? What tax rate is the gain taxed at? Is it the capital gain or marginal rate?
Re: Flipping properties & taxes - Posted by elliemay0
Posted by elliemay0 on July 24, 2003 at 22:00:43:
Being a newbie myself and having only done 2 fix-up and resells,I consulted a CPA. He said I was self-employed, because I did not hold the properties. Thus, no capital gains tax involved (which is 20%). However, he defined me as self-employed. Therefore, any profit shown would be 15% tax.