I am well aware that I need the advice of a tax accountant on the following question. Unfortuantely the accoutnants I have called haven’t been interested in my business. I am still looking for the right accountant.
I have done extremely well buying tax sale properties and selling for cash. I now wnat to owner-finance some of these properties on a contract for deed. I plan to sell lots for $3495 apiece with 6.9% interest for 5 years with $250 down. I do not plan to qualify the purchaser with a credit report or income verification, since if they don’t pay the lose all rights to the property and I can re-sell it again. I only have around $100 in the lot.
I make over 60,000 a year from a regular income plus my cash sales. Should I continue as a sole proprietor and use the installment sales tax treatment, should I use the accrual method that states you take a gain equal to the price the note would sell for (obvoiuosly not many note buyers would pay much for this note), form a c-corporation in NV to sell these properties.
What are your opinions, obviously this is a good problem to have, but I like the fact that the first 50,000 income in a corp is only taxed at 15% as opposed to my much higher bracket. I paln to accumulate this money and re-invest it. I would pay myself a minimal amount of wages if needed.