Level 3

flipping houses

Forum|Forum|5 years ago
May 25, 2021
1 reply
13 views

I have a client that is incorporated as an LLC

this year he has bought (cash), fixed and sold 11 homes. This is his only source of income.

how do I report his salary and his assistants salary (no payroll here) and take it out of the gains from the sale of the homes. Do I deduct a portion off each homes gain ??

This topic has been closed for replies.

T

TaxGuyBill

Level 15

An LLC is not "incorporated". It is "formed".

This is a business. If it is a Single Member LLC that has not made an election to be taxed as a corporation, the business goes on Schedule C.

Schedule C has a place for wages or payments to contractors (the assistant really is an employee, so payroll should be done to correct that). The homes should be listed under the Cost of Goods Sold/Inventory section.

C

CL44Author

Level 3

Thanks.

Also would it be better for him to be incorporated (s corp). he has a loan of $114,000 he made to some one else. A/R. where do I reflect that in sch c?

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TaxGuyBill

Level 15

@CL44 wrote:

Also would it be better for him to be incorporated (s corp).

he has a loan of $114,000 he made to some one else. A/R. where do I reflect that in sch c?

Maybe, maybe not. That requires looking at the ENTIRE situation and analyzing it closely. That is definitely not something can be analyzed via a forum like this. An S-corporation has the possibility of saving some tax. However, *IF* there are tax savings, the you and the client would need to weigh out if that savings would offset the extra costs and recordkeeping (being on payroll along with all associated forms and fees, a separate tax return, etc., etc.).

Loans are not reflected on Schedule C.

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