Would appreciate any help on this one.
I have a 4 unit building that I am selling for 410k via my LLC. At that price, my profit would be 115k. Found a buyer willing to agree to that price, but would like the balcony on each unit redone. The estimate for the job is 30k.
Now, if I give him the 30k back as rehab credit, how would that affect my taxes on the profit from the sell? Would I be taxed for the 115k profit or 85k profit?
Would it be better to structure the contract so that my LLC would fix the balconies after receiving payment. Would I then be able to declare the 30k as expense, which would then again allow me to be taxed for 85k profit instead of 115k?
Thanks everyone.