Tax rate for Flippers and Wholesalers

[James Kandasamy]

i was told by my mentors that the tax rate is very high for the capital gains for flippers and wholesalers compare to landlord. I understand the landlord part clearly, however does not know how much tax does a flipper or wholesalers pay ? Can someone shed some info on this ?

[Jon Holdman]

Actually, @John Rooster its more complex than that. If you buy a property with the intention to hold it, you are correct. Short term capital gains tax applies if you end up selling in under a year, long term (currently capped at 15%) if more than a year. Self employment tax (SET, which is social security plus medicare, including the half an employer usually pays) doesn't apply.

OTOH, if your intent is to resell, even if you hold it more than a year, its still just ordinary income and subject to both tax at your ordinary income rate and SET. Wholesaling is always just ordinary income.