When setting up an LLC... - Posted by Michael Waller

Real Estate Investing
1

Posted by Nate on February 09, 2001 at 09:58:52:

No, that’s pretty much right! :slight_smile:

Nate

2

When setting up an LLC… - Posted by Michael Waller

Posted by Michael Waller on February 08, 2001 at 15:15:53:

When setting up an LLC for flipping…
Can the description of your business cause you to become classified as a dealer?

If this is the case, what wording should be used to describe
the business?

thanks,

Michael

3

Re: When setting up an LLC… - Posted by Hutch

Posted by Hutch on February 08, 2001 at 22:11:23:

First off “I’m a newbie” but I have read just about every how to article and post on this site. From what I understand the ideal is to set up two LLC’s or corps so that one can be used for your flips (you will be taxed on profits for houses kept too little time as slef emplyeed (dealer)) and set up another corp to buy houses in that oyu intend to keep for long term investments. The ideal (I think)is to keep your long term houses from getting taxed as “flips” when you sell them on installments. Also the benifits of liabality figure in here too. If you flip properties there is no way to get out of paying the higher “dealer” taxes. But then again flips are not investments, they are resale just like used cars.

Again, I am a newbie, just putting in my thoughts.

Hutch

4

Re: When setting up an LLC… - Posted by Nate

Posted by Nate on February 08, 2001 at 15:24:34:

If you are flipping, you are a dealer. If your volume is sufficient, you will eventually be classified as such anyway regardless of the entity’s description.