LLC Tax Questions
Ok here is the story. My brother and I formed an LLC to buy, sell and Hold real estate. We both currently have w2 jobs. We are thinking about quitting our jobs and doing Real Estate full time.
My question is if we buy and sell lets say 10 properties this year. How do we figure out the taxes. I know we will have short term capital gains. Do we also have self employeement taxes in additional to capital gains?
Since we have bought and sold over 10 properties are we then condisered a dealer and taxed higher?
Would it be better to setup a C-Corp to buy and sell and pay our selfs a salary instead of the LLC flow through? Have the LLC for the properties we want keep and hold?
Thank you for your time
Yes, you would be considered as having a trade or business instead of investing and would be subject to self-employment taxes. C corps are not the best entity for the small business. Consider a S corp. After tax season, chat with a CPA who can fill you in on the details of an S corp. LLCs are generally considered best for rentals as this is not trade or business income.