You must be logged in to reply to this topic.
-
got this message from CPA John Groom
On the Wayne Carlson deal ? very good.
You might also want to mention that by his device he also has a BASIS of $60k in those two condos, meaning he could sell them the next day for cash and have no taxes.
I use things like this to help dealers all the time. If you sell something for $60k that has a basis of $60k, it doesn?t matter if you are a dealer or investor, whether it is short-term or long-term, whether there would be self-employment tax issues or not, etc.
The real profit, based on the difference between the intrinsic ?soft? basis of the purchase (the well-crafted note/mtg), and the ?hard? selling price (cash) does not show up on a tax return.
I use variations on this theme (some of which you have used I know) for flippers to get a high (soft) basis on a piece of property when it is purchased so it can get rid of most or all of the dealer profit, self-employment taxes, etc.
As an aside, there were some people in the UK that understood this so well and used it so effectively that it is no longer legal there.
You must be logged in to reply to this topic.
