Capital gains reported on Schedule C

[Brian EA]

Taxpayer purchased a Lien on a property and within a year resold it back to the owner. An LLC was created specifically for this type of transaction.
If the transaction is reported on a Schedule C the taxpayer will have to pay self-employment tax. If it is reported on Schedule D, he will have to pay Capital Gains tax.
Any ideas how I should report this transaction?
Thanks
Brian

[Rapid Robert]

It depends on whether liens so purchased are capital assets, or items held for sale (inventory). At first blush, seems to be the latter.

[Brian EA]

The Taxpayer goes to auctions and purchases these liens. If after a year the original owner does not reclaim the property, then the taxpayer sells the property and reports capital gains. In this particular case the original owner paid the lien and reclaimed the property within a year. I think the property should be considered a Capital asset and if so, how are they reported on Schedule C?
It would have been a walk in the park if no LLC was created for this particular transaction. I would just report it on Schedule D.

[BOB W]

Sounds like ordinary income because this is his business operation (inventory as RR said) Subject to SS.

[TaxGuyBill]

It would have been a walk in the park if no LLC was created for this particular transaction. I would just report it on Schedule D.

The LLC has NOTHING to do with it.

Are they in the business of purchasing liens and selling them? It seems to be an ongoing activity with the intent to make a profit, so at first glance it seems to be a business on Schedule C. But whether or not they have an LLC has no effect on that.