Posted by Bud Branstetter on February 02, 2000 at 22:29:16:
Redneck saying-You are probably a dealer if you buy and sell using a corporation multiple times a year. You are probably not a dealer if you only do a couple.
You are probably a dealer if your income is from buying and selling. You are probably not a dealer if you have a job and most of your income is from the job.
You are a dealer if you buy with the intent to resell.
Dealers have to pay taxes in installment sale profits in the year of sale. Non dealers can elect to do an installment sale.
Contracts for deed many times get more down and higher monthly payments than lease options. Contracts may take longer to get possession of the property if they flake out. L/O are an easy way of selling but so is owner financing. The preferred method of sale is cash to you. It is amazing what a good mortgage broker can do to accomplish that. If not a note sale can get much of the cash. Contracts for deeds and L/O are good when there are problems with the property. L/O is a good method for an investor to sell to get long term capital gains or installment sale consideration even if he buys and sells other property from a corporation.