The Hidden Tax Bomb in Real Estate Flipping (How to Minimize It!)

[@alexjoungblood8759]

How do you handle bank accounts with multiple LLC's ? are you opening up a NEW bank account for each LLC ?

[@ClintCoons]

Best practice would be to open a new bank account for each LLC. Also title will most likely require you to have an account for closing.

[@JoshBRealEstate]

great stuff!

[@B.Goodwyn]

Please go deeper on this topic or can you recommend any videos you've created on this? Also, knowing that you may be taxed as a Dealer, what are ways to benefit in that event?

[@rwj-kthxbye]

How do we handle this when we sell on an agreement for deed (an installment sale) and we keep the deed? We can’t dissolve an LLC after the agreement is signed so could we use an LP that still holds title to the property? Also, can we throw in a land trust where the LP owns the beneficial interest?

[@ClintCoons]

Correct you keep the LLC alive until title passes to the buyer.

[@rwj-kthxbye]

@@ClintCoons How can we do this without being tagged as a dealer? Is a C corp exempt from dealer status where we could run the profits through that?

[@yourfavoritecio]

Would you have to set up an LP when you first acquire the property that you plan to flip? Or after the rehab is done can you deed the property over into the LP? Just curious how flexible the strategy is since we may not always know exactly what the exit looks like after rehab...

[@ClintCoons]

Either way but the fist method is preferable.

[@shippenman5977]

Installment sale, dont you pay all tax on gain in first year. Then buyer defaults. Arent you screwed? Love your videos

[@ClintCoons]

Yes if you are flipping this is an issue.

[@whymindsetmatters]

For flips can you just form an llc taxed as a c-corp

[@ClintCoons]

Yes

[@JtotheRizzo]

Wouldn't this workaround expose you to liability on that LP since you are 99% Limited partner? Why wouldn't it make sense to have your corp limited partner and you the GP? If you have to be the limited partner, does it make sense to form a WY LLC to take your place as the GP?