I always feel a bit awkward when asking a question because it makes me feel lazy for some reason lol. When you do an assignment wholesale deal how are you taxed? I do not currently have an LLC. I don't if I could have asked this question better but I appreciate the feedback a lot guys.
Did you search the topic on BP? I found several threads on the topic that could answer your question I think but could be wrong.
Wholesale Tax Implications on the BiggerPockets forums
There are a couple but I don't think you need an LLC because you will be taxed as self employed no matter what and therefore probably paying twice. One as llc and one as yourself. Hope that helps.
This site is great I've been learning so much. Still a newbie
Unless you elect special tax treatment an LLC has no effect on taxes.
Income from wholesaling, regardless of exactly how you do the deal, is ordinary income. Subject to federal and state income taxes (local if there is one), social security and medicare.
Thx for the feedback guys. @ Jon so I would be taxed only on the profit I make. Nothing tricky like the total selling price of the house? Questions I'm sure sound dumb but in my life I'm so used to surprises that I don't wanna leave any possibility over looked?? Thx again
Taxes are only on the profit. Fix and flipping and wholesaling are really no different than a shoe store or a widget factory. You buy raw materials. You add value with labor and other materials and you sell it. You subtract all your costs from the revenue to get to taxable income.
As a self employeed business, you're responsible for both halves of the SSI and medicare.
Thx for the help Jon.
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