So today I was outside sanding and prepping those barn shelves for the master bedroom and there was this black hornet out there and he was hell-bent on stinging me. I had a can of wasp spray and used almost the entire can and he’s still alive right now as I type. I’ve never done something so annoying and couldn’t figure out how this hornet didn’t have something better to do. I managed to get the wood completed, dodging this hornet and then went in and made myself a coffee and went back out with the intentions of killing this pesky biter. As I sipped my coffee, dreamed of how me and Matt can’t wait to get the keys to the home I remembered that I saw my accountant in the morning as I made an appointment to ask about tax consequences but before I delve into that subject let me just tell you that like I said in a previous post…anything you think that will go wrong WILL. I sent my earnest money to the title agency using certified mail with tracking number… I’ll go track and see where it’s at! I’m back, it’s to be delivered by 8 p.m. this evening. Tell me why I paid $ 5.95 to send something certified when I could have put a stamp and they would already have had it!

So back to my post. I wanted to confirm with my accountant what my tax consequences would be and if I should get an S Corporation to escape some of the 15.3 percent SE tax but there is no way around the fact if you buy a home, quickly renovate it, list it and sell it and don’t hold it for the full year as a rental or intent to rent….that your profit will be taxed as ordinary income…that’s right people, ordinary income so lets just say I profit $ 30,000 on this sale, I have to add that to my other income having it cause me to pay the IRS $ 10,000, $ 1,700 in state taxes and $ 300 in locals in taxes and as if that isn’t enough I also have to pay the 15.3 percent Self-Employment income at another $ 4,590 so our legislators and congressman can get huge raises. I found the home, I figured out that it’s profitable, we took care of everything and we also risked our money to buy it but the government wants more than 1/2 of my cut and work. Ridiculous but my accountant said as long as you are paying taxes you made something and laughed and laughed about the IRS wanting 1/2 of a person’s income. It’s wrong on so many levels but the alternative is to hold it out as a rental for a year and have all those expenses which would total $ 5,000 so either way………… Uncle Sam makes more than me……Sad.

Published by Cyn

I like to keep busy, help as many people as I can and am very spiritual and believe that we are not in control of our lives and that God makes all our choices by changing events throughout our days. One tiny change in my life is a domino affect on millions of people.

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