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Updated over 2 years ago on . Most recent reply

Daniel Alfandre's profile image
Daniel Alfandre's profile image
Daniel Alfandre
  • Flipper/Rehabber
  • from Maryland
  • Member since Apr 13, 2019
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Daniel Alfandre's profile image
Daniel Alfandre's profile image
Daniel Alfandre
  • Flipper/Rehabber
  • from Maryland
  • Member since Apr 13, 2019
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Daniel Alfandre
  • Flipper/Rehabber
  • Maryland
7
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58
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Tax, SDIRAs & Cost Segregation

Building a house for parents - tax savings?

Daniel Alfandre
  • Flipper/Rehabber
  • Maryland
Posted

I am managing the construction of a house on an investment property my parents own. They said they would pay me a fee and split some of the sales profits with me. Any tax savings I can get on this type of relationship/structure? Thanks.

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Bruce D. Kowal's profile image
Bruce D. Kowal's profile image
Bruce D. Kowal
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Bruce D. Kowal
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Bruce D. Kowal
Tax & Financial Services
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#3 Tax, SDIRAs & Cost Segregation Contributor
  • Metro NY + New Bedford
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Bruce D. Kowal
Tax & Financial Services
Pro Member
#3 Tax, SDIRAs & Cost Segregation Contributor
  • Metro NY + New Bedford
Replied

I don't see anything special.  The fee is ordinary income.  And the profits from sale are likewise ordinary income, not capital gains, as you do not own the property.  But you get cred from your Parents by being a conscientious and dutiful Son.  And that's worth something . . .

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