Need Tips, Just started a Family REI Business!

[Jose E Zamora]

Greetings Bigger Pockets Community,

I am Jose Zamora out of Dallas, Tx. I have been listening to Bigger Pockets Podcasts recently and keep hearing over and over again how interactive and helpful the community is for BP. So I decided to register and become more involved in the community especially since I will need some tips/tricks as I embark in my first RE house flip deal.

 My family and I ( brother, parents, I) have decided to give real estate house flipping a shot. We recently closed on a house we got a deal on and will be financing the project mostly through Hard-Money Lenders ( 60%), while the rest (40%) would be equally split among the 3 family members.This house will be remodeled and put back on the market hopefully within the month after getting started. We will be doing much of the labor for the renovation and have plenty of knowledge in that aspect (since we are contractors) but are deeply concerned about the process we should take in regards to avoid cashing out most of the profit margin to the IRS because we didn't know, or also registering as what type of llc/Co. since we have 3 different parties + the Lender involved here.

We really need some advice in order to be ready when taxes come around. How should we prepare for them? How should we report? Does registering a new company benefit? Since we are 3 different entities contributing to this deal (brother, Parents,Myself), we want to be sure we do not shoot ourselves in the foot due to the lack of knowledge on this area.

We do need some help with this as we are trying to enter this market. We have been in the contractor business for quite some time, but this is an area that we have not exploited and want to be sure when tax time comes around, the evil IRS doesn't take an unexpected amount of the profit margin we weren't prepared for. 

Any feedback, advice, referrals, or any suggestions are gladly appreciated.

Thank You,

Jose Zamora