I have a client who wants to buy homes, make improvements and sell them for additional income. I explained him that he will be considered as real estate dealer and not an investor. Please correct me if I am wrong about real estate dealer or if there is another route out there. And I informed the client that he will be subject to self employment taxes. But will he also be eligible for section 199A deduction? Also what will be his business code for schedule C?
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Sch C because this is more than a one time event. Yes, he is eligible for the 199A deduction.
Chris -
Let me resurrect this one.
Is there a guide or some info on how many houses I can flip before the service will consider me a dealer making it subject to SS tax. I have a TP who is a landscape operator but during the course of 2 years flipped 3 houses. Selling all 3 this tax year. bought 2 in 2017, 1 in 2018. Fixed them all and sold them all. Your opinion please TP main income comes from landscape work. TP bought one in 2016, repaired it and converted it to rental. The hard part does this require a separate Sch C? During winter months to keep employees on payroll tp has them work on these houses and all pr is run through landscaping business. TP did not keep them separate. My thought is that because of what he did and done makes tp a dealer. Would you agree?Comment
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The two he held from 2017 to 2019 without renting are flips and he should use a schedule C. The one from 2016 is a Capital gain (or loss) that should go on schedule D. Does he pay the employees on a W2 or 1099?"Dude, you are correct" Rapid RobertComment
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