Does anyone know if one has to pay full federal income taxes on the profits from a wholesale transaction. I did a couple of deals so far this year and took home cash in pocket from the transactions. Because I am new I have not created a LLC or any company yet. Do you know if I am subjected to full income taxes for 2006? Not sure where to go from here on tax deferred options for these profits.
regular business income, taxed at marginal rates, plus self employment tax.
that probably puts you at about 40% total tax bite. sucks to be considered by the democrats to be “rich” doesn’t it?
be sure to record all of your deductible business expenses (mileage, office exp, etc).
Yes it does stink. I am figuring I need to do a couple of wholesale deals each year just to pay off the tax bill. I was just wondering if there were any other loopholes I should consider before I do my next deal that I do not know about.
keep up with all your business expenses; they are deductible.
Get in touch with a CPA my man. Yes it sucks paying Uncle Sam. This is the price we pay to be filthy rich (J/K) Deduct, deduct, and then after your done with that deduct some more. This will help offset your cap gains. If you want “loopholes” get in touch with a CPA who knows real estate.
Nate-WI