Posted by JHyre in Ohio on January 15, 1999 at 11:09:21:
You mentioned that you rehabbed the property. Some people rehab to hold, while others like to flip immediately after rehabbing. If you intended to hold the property, you may use the installment sales method. On the other hand, if you intended to flip, you are a “dealer” with respect to that property and cannot use the installment sale method. You can have rehab properties that are both for investment and for immediate sale- just keep them in separate businesses so that the dealer properties do not taint the non-dealer properties. Chances are that you will want to put the dealer properties into a C-corporation, while the investment properties go into an LLC or S-corp. See Bronchick’s articles for tips on choice of entity and an explanation of the preceeding sentence.