Posted by JHyre in Ohio on January 16, 1999 at 07:55:31:
IRS dealer rules apply to ANYTHING that you sell on a regular basis…MH’s, houses, planes, trains, drugs- you name it.
Paying taxes on “flips” - Posted by Nate
Posted by Nate on January 15, 1999 at 01:09:07:
Question for Jackie and the fellow family of flippers:
How have you reported earnings on these deals?
Is there a limit on how many you can do a year before you are considered a dealer, etc?
All the realtors I’ve even mentioned this concept to look at me like I’m crazy. “Flipping?? What’s that??” Is there anything to worry about with the law as far as it being a way to make money as a middle man, yet avoiding all the legal crap the brokers/realtor have to go through (licenses, etc)?
Re: Paying taxes on “flips” - Posted by JHyre in Ohio
Posted by JHyre in Ohio on January 15, 1999 at 11:14:06:
See Bronchick’s article(s) on why a C-corporation is probably the best entity for “flips”. The number of flips has little to do with “dealer” status- your intention to quickly resell, as opposed to hold, the properties confers dealer status. Sue’s advice is right on the money.
John Hyre
Re: Paying taxes on “flips” - Posted by Sue (NC)
Posted by Sue (NC) on January 15, 1999 at 09:17:21:
Flipping profits are a textbook example of ‘dealer’ income: you have bought or acquired your interest with the express purpose of resale. In this situation, you pay taxes as ordinary income (not capitol gains), and you cannot trade properties (or interests in them) thru a 1031 exchange…
But ‘dealer’ in this case is simply an IRS categorization… In essence, you pay extra in taxes (versus a longer term investment). No special license required.
Re: Paying taxes on “flips” - Posted by PETER
Posted by PETER on January 15, 1999 at 21:19:53:
I’M A LITTLE BIT CONFUSE ABOUT DEALER AFTER A CERTAIN
NUMBER OF FLIPS. ARE YOU TALKING ABOUT MH OR HOUSE.