Wholesaling Fee Income- What Tax do you need to pay?

[Jake K.]

Basics: On a typical wholesale deal, for example someone gets their first deal done and makes a $10K assignment fee, (and doesn't do a 1031 exchange). Is there a basic tax rate that he will have to pay at tax time or is it just based on their overall income. So if their annual income for that year isn't that much and they wouldn't owe taxes for their overall income normally, is there still tax that need to be paid specifically because it is earned from a RE transaction? Any RE tax professionals out there that can answer this? Thank you

[Pratik P.]

It's taxed as earned income. I'm not sure how one would do a 1031 exchange on a wholesale deal though...