Income Taxes & REI - Posted by ALJ

Real Estate Investing
1

Posted by Robert (NC) on February 08, 2002 at 11:13:53:

Yes to all…
Just remember to track your expenses so you can deduct them… I’m sure you did all of the above through your own company and you kept GOOD records, receipts for everything…

Robert

2

Income Taxes & REI - Posted by ALJ

Posted by ALJ on February 08, 2002 at 10:58:56:

I am very much a newbie at this and have a newbie-type question. Do I pay federal and/or state income taxes on money I make from any of the following?

  1. Wholesale flip where I do a simultaneous close.

  2. Wholesale flip where I assign it to someone else.

  3. Lease/Option when I take up front cash as a downpayment.

  4. Lease/Option when I take profit between my payment to owner and lessee’s payment to me.

  5. Profits from renting investment property that I own.

3

Re: Income Taxes & REI - Posted by Dave T

Posted by Dave T on February 09, 2002 at 24:37:30:

  1. Yes.

  2. Yes.

  3. Yes, when any money taken as a down payment is forfeited by the buyer. If for some reason, you have to refund the down payment money, then there is no tax consequence. If the option is exercised, then downpayment funds are applied to the purchase as a prepayment and are included in your taxable profit on the sale.

Any money you accept as option consideration becomes taxable income only when either the option is exercised or when the option expires.

  1. Yes.

  2. Yes.