Posted by Richard Rynkowski on July 28, 2001 at 24:46:23:
whoa… OK I sell three properties and the IRS says I’m a dealer. Since I’ve been declared a dealer don’t I have to pay all the disadvantages (taxes) of being a dealer on these three sales??? If so, what is the sense of killing the corporation and starting over…??
Also, aren’t you boardering on tax evasion not just tax avoidance?? I think you may want to talk to your CPA and a Tax attorney before going this route.
baltimore area flipping - Posted by Eric
Posted by Eric on July 27, 2001 at 03:47:54:
I would like to know if flipping is because the buyer of the home defaults on a loan. I own 3 properties in baltimore and have owned less then 3 months would I have any worries or problems if I were to sell them so soon for profits over 20000 dollars each.
Re: baltimore area flipping - Posted by Nick
Posted by Nick on July 27, 2001 at 05:53:51:
Eric,
If you sell more than one house per year for profit the IRS could label you as a dealer. If you are considered a dealer the rule goes once a dealer always a dealer.
However, I assume you want to sel these properties so there is a solution. Form your own corporation. Move the title is some form or fasion to the corporation, I like to use a land trust. Sell the properties with the corporation. If the IRS audits you and labels the corporation as a dealer just kill the corporation and start another one.
Isn’t this stuff just alot of fun. Bet you never thought you would own your own company someday, Huh?
Hope this helps
Nick