I am looking to purchase three properties in the near future, if the numbers work, that are all vacant and bank owned.
I plan on rehabbing one and wholesaling the others.
Does anyone know how the taxes will affect me? If one property is purchased for 70k,worth 140k, and I wholesale it for 85k. How can I, legally, avoid paying high capital gains on the 15k profit?
Jaz
Loan Officer (Ga, Fl)
<<Does anyone know how the taxes will affect me? If one property is purchased for 70k,worth 140k, and I wholesale it for 85k. How can I, legally, avoid paying high capital gains on the 15k profit?>>
The short answer is that you can’t avoid the taxes legally…and they will be short term capital gains taxed at your regular income tax rate…
Some folks will chime in here about smoke and mirrors and different retirement hooey.
You’ll have $15K profit – pay the taxes. It’s the price that you pay for success.
Keith
When are the taxes paid? At the end of the fiscal year or when you receive the check?
If the check is cut to me personally, taxes are usually taken out at closing ( to my knowledge), but if cut in the name of a company, at the end of the fiscal year.
I’ll be doing all my business through my company.
jaz
I agree, just pay the taxes and enjoy the profits. As far as when you pay them, leave that up to your accountant.
Say to yourself; “I am a real estate invstor, not an accountant, I am a real estate investor, not an accountant…”
Just messing with you, but don’t get caught up in figuring out something a professional can do for you. You will benefit greatly in the long run.