turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Short term capital gains

Single member LLC. Several property flips for year 2022. Short term capital gains of around $85,000.00. Need creative recommendations to reduce my tax liability for year 2022. I have a high W2 income so tax bracket is on the higher end. I have expenses that can be deducted for repairs/upgrades to properties but not enough. Any ideas? I have read about depreciating the purchase of a company vehicle but not clear on specific details it would be a truck not a corvette. 1031 was not an option due to the nature of the rapid real estate transactions. I would prefer to do something that I can use or benefit from now and not if I make it to 65 years of age. 

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions

Short term capital gains


@Skywalkerllc wrote:

Single member LLC. Several property flips for year 2022. Short term capital gains....


You initially need to determine whether or not you would be considered a real estate dealer as opposed to an investor in real estate. 

 

If the properties were being purchased and repaired/improved, primarily for sale to customers in the ordinary course of business, then the gain is not capital gain but ordinary (earned) income and subject to self-employment tax. The profit would be reported on Schedule C of your individual income tax return.

 

 

 


@Skywalkerllc wrote:
1031 was not an option due to the nature of the rapid real estate transactions.

Section 1031 would not be an option if you are considered to be a real estate dealer with respect to any properties since that section does not apply to inventory. 

 

 

 

See https://bradfordtaxinstitute.com/Content/Defining-Real-Estate-Investor-and-Dealer.aspx

View solution in original post

1 Reply

Short term capital gains


@Skywalkerllc wrote:

Single member LLC. Several property flips for year 2022. Short term capital gains....


You initially need to determine whether or not you would be considered a real estate dealer as opposed to an investor in real estate. 

 

If the properties were being purchased and repaired/improved, primarily for sale to customers in the ordinary course of business, then the gain is not capital gain but ordinary (earned) income and subject to self-employment tax. The profit would be reported on Schedule C of your individual income tax return.

 

 

 


@Skywalkerllc wrote:
1031 was not an option due to the nature of the rapid real estate transactions.

Section 1031 would not be an option if you are considered to be a real estate dealer with respect to any properties since that section does not apply to inventory. 

 

 

 

See https://bradfordtaxinstitute.com/Content/Defining-Real-Estate-Investor-and-Dealer.aspx

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies