Flipping and tax rate

[Andy Lanyi]

If you flip a house with in a year and incur a tax rate, "ordinary income"then does all of your other income from your rentals "long term income"get taxed at the same rate as ordinary income? Or do you have to have all other assets in a different LLC's to protect that?

[Kory Reynolds]

The LLC has no impact on the effective tax rates.

Also if you acquire a property for the purpose of flipping, that will always be Ordinary Income, also likely subject to self-employment taxes.

That particular sales event has no impact on the taxation of your normal rental income from other properties.  All rental income is subject to ordinary income tax rates as well, though it is not subject to self employment taxes.