Capital Gains On Flipping Property In Texas
Hello,
I have been flipping single family homes in Texas, and the taxes are eating up a lot of the profit. A friend in real estate said that if I formed a s-corp that I could keep the profits in the corporation and avoid taxes by reinvesting in the corporation. Is that possible? I am going to try and find a good Real Estate Tax accountant for advice, but if anyone has any ideas to lower my taxes, I would appreciate it. Also, I am not in the position to hold my properties for over a year to avoid short term capital gains.
Thanks,
Currie
Income from property flipping is ordinary income regardless of your holding period -- capital gains do not apply.
Report your income on Schedule C and Schedule SE. Even if done within an S-corp, the income your corp retains is still taxable to you on your personal 1040.
Consult your own tax advisor for specific details.