Do i have to pay taxes?
As a wholesale real estate investor, do i report or pay taxes on the assignment fees? I've watched alot of videos on youtube from investors and they never discuss that part. I am new to this business and i want to be aware of things like that. Any answer would be greatly appreciated.
Yes. I would guess it goes on Schedule C so you will get to pay self employment taxes and income tax on your earnings. You can also deduct your business expenses.
Wholesaling RE is a business and subject to income tax.
@kylemeyers The way you say it, makes it seem like it's a benefit to pay them lol, but thank you for info, it's greatly appreciated.
Its income. Its taxable. You mean to say the gurus that try to convince you that buying their wholesaling course is a easy path to babes on a yacht in the Caribbean neglected to mention the taxes you will own? Say it's not so!
Jeffrey Mathurin,
I'm usually not very critical, but I must say why in the world would you think that it wouldn't be?
This will be the same even if you are an LLC.
Yes it will be required to report it as income. If you are operating as a Sole Proprietor(Single member LLC - no corporate election) you will file Form Schedule C and report all income and expenses there.
If you elect S-corp status as an LLC you will include all income and expenses on Form 1120-S. You will have to pay yourself a "reasonable salary".
-Steven the Tax Guy
-
Enrolled Agent
- Hamilton Tax and Accounting
- (224) 381-2660
- http://www.HamiltonTax.com
- [email protected]
You might also have to file estimated taxes, since this will lead to lumpy income, so don't be surprised by that.