Dumb Ques. About Flipping Income
I'm looking to get started doing some contract flipping to investors (Im currently building up my network of investors), but I had a really dumb question: I'm assuming the assignment fee I collect from the investor is categorized as ordinary income and just goes on my 1040 Schedule C?
I would assume so, wouldn't you? As far as im concerned, that income is liable to taxation and it shouldn't matter if it's from an employment check or a freelance contractual business deal. Either way I personally would write it as "ordinary" income and write it as you would income from a regular job.
I hope this helps, and if im wrong I hope someone steps up and straightens it out. Good luck!
Quote:I'm assuming the assignment fee I collect from the investor is categorized as ordinary income and just goes on my 1040 Schedule C?You are absolutely correct. Also your net Schedule C income is used to calculate your self-employment taxes on Schedule SE.
Car_Boy, this is self-employment income, although taxed at ordinary income tax rates.
DaveT,
Heh, I'm very familiar w/ the Schedule SE self-employment tax as I'm currently self-employed and even though I know it goes towards my social sec. and medicare contribution, it still irks me that I have to fork over the 15.3% (my current biz has more write-offs than income, so at least I'm getting a freebie there).
Sorry, I did not mean to offend your intelligence or expertise. You just dumbed down your question so much, I thought you did not know about self-employment income taxes on your Schedule C profits.
DaveT,
It's been a long week. Just need to get some deals done 
No problem. Its all good. I didnt take it the wrong way