Double Closes and Income Taxes
Newbie question. As a wholesaler, if I utilize a double close, how will this strategy affect my income taxes? What's the bottom line, will I pay more taxes than I would if I did a traditional real estate transaction? Thanks.
Most Popular Reply
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
I THINK either way you’ll face the highest possible taxes. Full regular income tax plus possibly self employment tax, plus applicable state(s) tax, not sure about the Obama-era surcharge tax.
Double closing will add costs and therefor lower your income and taxes owed, but hardly what you would call a win. I assume anywhere you can get away with it you do one closing if you don’t plan to hold for at least a year and fix it up or 2 years and fix it up as your primary. (2 plans that might pay for themselves with reduced taxes and/or living expenses…)