How should I set up my business

Question

I have been flirting with the idea getting totally involved in real estate for some time. I am at the point now to jump in the deep end, both feet.

I am looking to flip propoerties working toward buy and hold for income.

I am already spending money on cards, yellow letters, web sites, etc. I have never owned a business or taken a business course. I realize I need to capture costs/expenses and then taxes (yay). What should I be doing to get my business set up right so I get full write off for my expenses and pay "properly"  my tax responsibilites.

Doug

Doug Haisten · Answer

Thanks guys! As always BP is gold mine I for getting advice and ideas.

Sidney S. · Answer

When we were in your position, we had a tough time figuring out what was right for us. We ended consulting our tax advisor and attorney to make our final decision.

I know there are quite a few people out there that operate their real estate business without ever incorporating. We have investment property in our personal name, but mostly in under our entity. Last tax year, we were disappointed when we couldn't itemize our expenses under our personal name because cost-wise it didn't reach a certain threshold.  If you have expenses related to your entity you can expense those.

With regards to where you're at, it sounds as though an LLC would be ideal. Please make sure to contact a professional for advice based on your personal needs as I am by no means a tax professional and am simply speaking based off of personal experience.