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Flipping houses can be profitable—but from a tax standpoint, it is rarely simple. In this presentation, I break down exactly how the IRS classifies flipping activity, how your intent determines whether you are treated as a dealer or an investor, and why this distinction controls whether your gains are taxed as ordinary income or capital gains.
We will also examine key risks: self-employment tax exposure, timing of deductions, and how frequent activity can turn a passive investment into an active trade or business in the eyes of the IRS. I will explain the tax traps that catch most flippers off guard—and how to structure your deals defensively to keep more of what you earn. Learn more: https://www.cummings.law/understanding-tax-implications-of-real-estate-flipping/
By Cummings & Cummings LawFlipping houses can be profitable—but from a tax standpoint, it is rarely simple. In this presentation, I break down exactly how the IRS classifies flipping activity, how your intent determines whether you are treated as a dealer or an investor, and why this distinction controls whether your gains are taxed as ordinary income or capital gains.
We will also examine key risks: self-employment tax exposure, timing of deductions, and how frequent activity can turn a passive investment into an active trade or business in the eyes of the IRS. I will explain the tax traps that catch most flippers off guard—and how to structure your deals defensively to keep more of what you earn. Learn more: https://www.cummings.law/understanding-tax-implications-of-real-estate-flipping/