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I am building a house for myself and plan to do one to two specs a year in addition to my regular job.
First question: Shall I mark up the selling price of the house to myself so that I can have a higher basis on the home (for tax purposes if I sell the house within 3 years) and use the profit to write off expenses like my truck, etc.
Next question: If this business is not my primary source of income, would I need to pay self employment tax on any profit from the sale (if I chose to show a profit).
Basically, is there anything you can recommend that’s legal that will save me money. I am a proprietorship, but would be willing to convert to Sub “S” or LLC.
Does anyone else out there have a tax man that actually looks for ways to save you money?
Thanks in advance,
Bill
Replies
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I am building a house for myself and plan to do one to two specs a year in addition to my regular job.
First question: Shall I mark up the selling price of the house to myself so that I can have a higher basis on the home (for tax purposes if I sell the house within 3 years) and use the profit to write off expenses like my truck, etc.
Next question: If this business is not my primary source of income, would I need to pay self employment tax on any profit from the sale (if I chose to show a profit).
Basically, is there anything you can recommend that's legal that will save me money. I am a proprietorship, but would be willing to convert to Sub "S" or LLC.
Does anyone else out there have a tax man that actually looks for ways to save you money?
Thanks in advance,
Bill