![]() This is because their homes count as capital assets in the eyes of the IRS. Investors tend to pay less in taxes on their real estate income than dealers do. But the good news is that there are still several things you can do to ease that tax burden as a dealer. ![]() If the government classifies your house flips as dealer activities, it can increase how much you pay in taxes. That’s why the IRS ends up categorizing many wholesalers and house flippers as real estate dealers instead of investors. A real estate dealer, on the other hand, purchases and sells properties quickly and repeatedly. In general, a real estate investor is someone who owns and holds properties long-term. We recommend consulting with an attorney and accountant before buying a home to flip or filing your taxes in your state. Important Note: As part of your research you may have seen that there have been court cases over these taxes because the laws surrounding house-flipper taxes aren’t clear-cut. It also depends on your overall income in the year you sell the house, how you’re filing your taxes, and where you live. ![]() How much you pay in taxes when flipping houses depends entirely on whether the IRS views you as a real estate investor or a real estate dealer. Thankfully, taxes on flipping houses aren’t as complicated as they may seem-and they shouldn’t stop you from pursuing great deals! In this article, we’ll look at what you should know about flipping houses and taxes before you buy your first fixer-upper. But how does flipping a house affect your taxes? With home prices still rising, now is a great time to buy a home, make a few strategic updates, and sell it for a nice profit. Before filing your taxes, we recommend consulting with an accounting professional. Important Note: This article is for informational purposes only.
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