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?
<<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.
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.