Taxes & Sub 2 Deals Which Form
I have spoke to two different accountants. One says you only need to use Schedule C with Sub 2 deals. All the income is business income you receive from your homes. He says you can also deduct all the interest and real estate taxes and insurance using schedule C.
Another accountant says you must use Schedule E and report all income you receive on your homes as rental income even though the loan is not in your name.
Wondering what other people use?
Rob Carroll
Anderson Investment
Depends upon what you are doing with the property. What did you tell the accountants?
If you acquire Subject To and resell (whether a straight sale, a Contract For Deed, or on a Lease Option), then the first accountant is correct. All your business activity is reported on Schedule C and payroll taxes are calculated on Schedule SE.
If you acquire Subject To and hold in your long term investment portfolio for rental use, then the second accounting is correct. All your rental income and expenses are reported on Schedule E.
Hey thanks for the info. Your answer makes sense. BTW I lived four years in Frederick, MD and Braddock Heights.
Rob Carroll
Anderson Investment
Small world Rob.
I was born in Stillwater, OK.