I have run into a small dilema and want to make sure that I am utilizing all my option correctly even for my own auditing purposes. Meaning how many deals should I wait until I get an LLC, I have heard and read that you should wait unitl you get a few deals done but how is that going to help me come tax season? :help
My second question is how is everyone keeping track of their profits? Should I look at getting and accountant to assist me with all my transaction so I taxed properly if i can not do a 1031 tax exhchange? My concentration at the moment is soley on wholesaling to build up capital but those are some questions that I keep coming accross to myself.
The last question is really asking advice for example if I close on a deal and my assignment was $5K how much should I keep for myself? :help
An LLC has nothing to do with the number of deals. It has to do with your situation. If you are working with a partner, get some kind of limited liability entity before you start. If you have separate businesses or significant assets outside of real estate, you need some type of protection. If all your wealth is in real estate and you do everything yourself, an LLC won’t do much good if you have 1 deal or 1 thousand.
I would talk to a CPA that deals with the type of deals you do. You are not looking for a tax preparer or bookeeper. You are looking for someone that can advise you as to the best way to structure the deal to minimize taxes.
I agree with brockovich. Set aside 1/3 for taxes. If you were incorporated, you only need to draw a reasonable salary and you could put the excess into a benefit program where you won’t pay taxes on the income. This is an another area where are a tax expert can offer guidance.