Splitting Profits on a Flip

2 Replies

My mom and I are buying a house to flip. She will put up the money for the house and rehab. I'll be doing all the work. We're going to split the profits 50/50. This is my only job and will likely be my only reported income for 2019. How do we report that she paid me half of the profit on tax returns so that she doesn't get taxed again for profit that wasn't actually income for her?

@Lacie Gilbert Great morning,

I am not a tax professional by any means but I think she would write off the the money she paid to you as rehab expenses, maybe issue you a 1099 at the end of the year. Definitely talk to a CPA to do it the right way!

I wish you the best!

talk to an accountant for sure, but maybe if you plan on doing this more often you should start an LLC for yourself. Maybe have your own home improvement co. Then you can write off more and also have liability insurance on the work that you do.