Need help on TAX in LLC

My husband and I just form an LLC partnership, will use S-corp for tax purpose to start flipping business. We just sold our old house (primary home) and received $40K capital gain. We want to put that $40K cash into LLC to buy our investment property. My questions are:
1.What category we should enter in Quickbook?
2.Let say we buy our fist property for $22K, fix it for $18K and sell it for $85K. Do I only pay tax on $45K we profit or $85K?
3.If we take out the original $40K from LLC, do we pay taxes on that $40K?

Thank you so much in advance

  1. loan payable to Colnewbie
  2. 45k. be sure to include all your holding costs: utilities, insurance, donuts for the work crew, mileage reimbursement, cell phone, advertising, etc. DO NOT COMINGLE.
  3. No. You are taxed on the NET income after expenses from #2 above (which is why you want to be sure to include all your other business expenses.) Note that the income passes thru the S-corp to your 1040. Total tax on a flip ~45%. Once the income has been taxed, you can take cash out of the company up to the income amount (this varies depending on your specific circumstances) without additional tax. Or take cash out by repaying the loan in #1 (better).

Thanks a lot mcwagner. :biggrin