When wholesaling real estate. If i was to do a deal a day with a profit of 19K a week thats 40K. Now because this isnt a job or any business do you file this on your taxes? Will you be audited? What legal issues sill i run into???
If you make money from wholesaling, it's a business, and your report that as personal income on your tax return. If you don't, then expect trouble.
Even if you have never formed a company/LLC for your wholesaling business, you will still need to report the income from the wholesaling business on your personal tax return as self-employed and pay self-employment tax on it if there is a net profit. I would suggest that you open a separate bank account to track all the income and expenses that incurred for the wholesaling business. If you didn't report the income from the past years but you think that you should have, I would reach out to a tax professional to exam your previous tax returns and see if amendments are needed.
All income must be reported. Wholesaling and flipping profits are taxed as ordinary income.
@Christopher Smith you would likely be audited, fined, and assessed. Report ALL income from ALL sources.
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