Deeding Property To Corp To Lessen Tax Burden
If you personally purchased a rehab property, and decided to sell within the first year, could you create an s corp to deed the property to before it was sold. would this lessen the active income tax burden of the profit from the flip, or does the property have to be purchased under the s-corp to reap the tax benefits? or could you just sell it to the corp for the same amount that you purchased it for so you would have no taxable income from your sale to the corp. what is the best route to take if you don't have a corp set up before you buy a short term flip property. Thanks
Your taxable income and your income tax liability does not change under either scenario.
Income earned from your flips is still ordinary income to you, whether done in your own name, or passed through to you from your S-Corp. The advantage of the S-Corp is that, by taking a reasonable salary, you might reduce some of the self-employment income tax (social security and medicare) that you would pay in addition to your ordinary income tax.
Consult your CPA for specific details.