Taxes on a flip

[Forrest T Schue]

Hello. I’m currently in escrow for a property in Ohio that I was going to originally hold and rent, but now am wanting to flip.

I do not yet have an LLC set up in order to buy this property, and will be buying it personally. But I have recently learned the deduction tax benefits of flipping a property under an LLC.

If I set up my LLC, and move the property into it, AFTER,I purchase it in my own name, will I still be able to write off the purchasing cost along with the rehab costs when I file my taxes?

[J Scott]

Quote from @Forrest T Schue:

Quote from @Bill B.:

Nope. Your llc is ignored for tax purposes it’s used by people who want to make it 10% harder to find out their identity. Or to partner with someone(s) else. 

Can you write off purchase price,rehab,permit fees, etc. when you do a deal in your personal name?

The write offs are exactly the same whether you flip out of it LLC or in your personal name.  You can deduct any expenses related to the renovation, including labor, materials, permits, etc.

The only tax benefit to an LLC may come from an s corp election.  Talk to a CPA about your specific situation.