I need a mortgage, how do they prefer taxes to be filed?

[James Morris]

I am a small time real estate investor flipping vacant land. This is my full time "job," only income and I am looking to get a mortgage for a house soon, but first I must file two years taxes to qualify. How do you full time investors (without another job) file taxes in which would be acceptable to use as income for a mortgage? Is there a better way to file the profits than just as short term capital gains? Can you somehow claim it as "self employed" instead of just capital gains to make it more official on paper? Are there any computer programs you recommend, or what forms do you use? Thanks in advance and sorry for the questions (I'm new to the tax world.)

[Brandon Hall]

@Jacob Blackett great post and chock full of good information. I want to clarify one portion of it though: holding for 12 months has little (if anything) to do with whether or not his properties will qualify for capital gain treatment.

@James Morris since this is your full-time job and *I'm assuming* the income accounts for a substantial portion of your income from all sources, the activity will be reported on Schedule C and will be subject to your ordinary tax rates and self-employment tax, not capital gains. If you have little-to-no experience with taxes, I highly, highly recommend seeking professional advice from a qualified CPA.