In today’s world, there are a lot of ways out there for trying to make some extra money. One of these is flipping houses. This involves a person buying a fixer-up house, performing repair and renovation work on it and then trying to sell it for a profit.
There are many things a person should make sure to be aware of when engaging in activities to bring in some extra income. One is whether the activities they are engaging in raise any special tax issues.
Flipping houses is among the economic activities that have unique tax considerations connected to them. There are a variety of things that can impact what kind of federal tax liability a person would end up having in connection to profits they make from house flipping, including:
The unique tax considerations related to any special economic activities a person does to make some extra money are among the things it can be important for a person to factor into their overall tax planning. Ignoring such special considerations could lead to a person missing out on tax benefits or inadvertently getting into trouble with the IRS. Skilled tax planning attorneys can help individuals who engage in house flipping or other special economic activities with the unique tax planning issues raised by their activities.
Source: philly.com, “Before you flip that house, study up on tax consequences,” Caitlin McCabe, July 20, 2017
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