Taxes for a flip- General Question

[Derrick E.]

I will be using a CPA moving forward, but I'm really stuck on something that should be simple to know. I know about short term capital gains taxes, but also know about the self employment tax. My question is this:

When flipping a home (with my LLC if that matters) do I have to pay BOTH the short term capital gains and the self-employment tax. Or do I only have to pay one of them? This is the part that I am confused about. If it's both then I would be paying around 45% of my profit in taxes which would definitely push me to continue BRRRRing as opposed to flipping. I have two homes under construction. I have only BRRRRd but I am interested in actually flipping one of them, but need this tax info to run the numbers.

[J Scott]

No, flips aren't capital assets, so you don't pay capital gains (short or long-term). 

The income will most likely be taxed as ordinary income at your marginal tax rate, plus you're likely to be on the hook for self-employment tax for some/all of the income as well, depending on how you've structured the LLC.

Long story short, flipping is *not* a good way to shelter taxes.