Where to put flipping income?

[Quianay Laing]

Hi there!! We are doing our first flip and are debating where to put the income going forward in terms of managing our business.. We know we are going to immediately use some to purchase more property.

Those of you who flip- do you draw a salary from your business? (Thank you)

[Jennifer Gligoric]

It depends on if you have a S Corp or LLC or are doing business as a sole proprietor.

One thing you do not want to do is comingle. If you are doing that, I would advise stopping that right away. So many clients of ours admit to using their LLC or personal credit cards to pay a variety of expenses and bills, trying to code them all as straight business expenses then asking their tax person to sort that out later. If you work from home, you are only allowed to claim a portion of bills that directly correlate to the square footage of your home office space and certain restrictions apply.