When would long term gains be taxed as self employment income?
I currently work full time, and I have 10 properties that I have installment sales on, and they will be taxed using long term gains. I got the impression from my CPA that if I was to reduce my employed hours enough(or quit), that the installment sales would be taxed at self employment income rates. I asked where the line was, and he said I need about 60% full time employed to use long term gains? Any input or clarification? Is this just following the 50% rule of real estate professional status guidelines?
I am trying to figure out if I can reduce my employed hours, keep my income low, less than 40ishk and get in 0% capital gains bracket. Or make 60-80k in rental income (from other regular rental properties)and depreciate enough to show less than 40k. Then pay 0% tax on those 10 properties.
I have been trying to figure out how to obtain REP status to pas losses on, but maybe I want to avoid it so I don’t have to pay self employment tax. it seems that there may be a sweet spot, or efficiency spot, while I transfer to full REP status.