You buy a building. You fix it up. You sell it for a tidy profit.
Congratulations… but that’s not the end of the story.
You see, the IRS will want to know if your building is a dealer property or an investment property.
This distinction is not always easy to make… either for you or your tax preparer. What’s more it’s an important distinction that can have huge implications for you as you’ll discover when you read my new article titled Tax Tips: Is a Fix-up and Sale an Investor or a Dealer Property?
Three ways our fact-filled article can help you:
- You’ll learn why you may want to avoid “dealer” status. Becoming a property dealer can certainly be profitable. You’re in the business of buying and selling buildings. But always remember that as a dealer you will be taxed at painful ordinary income rates. You’ll get the whole story when you read the full article.
- We’ll tell you why claiming “investor” status may make sense. If you’re a real estate investor, you can qualify for favorable, long-term capital-gains taxation on your property sales. (Be sure you hold the property for more than one year!) All will be explained when you read the full article
- We’ll list five “takeaway” facts that may save your bacon. If you’re having a tough time deciding if you’re a dealer or an investor, this information can prove invaluable. Now is the time to read the full article.