Does the government require you to pay an income tax on a property that you are Lease Optioning and subletting to another tenant for a premium?
For example, if you have an agreement with the owner of the property to pay $600/mo. with a 50% rent credit and in turn are subletting the property to someone else for $700/mo…are you required to pay an income tax on that property for the extra $100 you pocket. If so, being that you don’t own the property, is there any legal way around it?
Do the deal in a Roth IRA and you will not have to pay income taxes.
The Catch
As all good things you have to wait to be able to spend it. The compensating factor is that you can use it to reinvest and grow tax free. As a lease option there is likely a larger back end when the option is exercised. Do a couple of those and you have the cash to invest as rehab or buy with all cash at large discounts.