Taxes Associated with Flipping Houses
Hi BP! I'm hoping someone can shed some light on some general tax questions as it relates to fix and flips. I've read several posts and have spoken with a CPA, but I'm getting conflicting and spotty information. I'm very close to purchasing my first property (in Michigan) that should profit $20K. I do have a W2 job as well. Here are my questions...
1. Will I be subject to both capital gains AND self employment on the $20K profit?
2. If I purchase another home at equal or greater price prior to filing taxes, will the $20K still be subject to these taxes?
3. I've read that holding the property in an S corp is one way to avoid the self employment taxes. I'm a newbie with a W2 who will be flipping maybe 2-3 properties per year on the side....is it worth it to open an S-corp? Is it difficult? Are there special qualifications?
Thank you in advance!!
Bryenne