Flipping through LLC taxes

[Cory Land]

I am having trouble finding article which discuss how taxes are handled when flipping properties under an LLC. If you could share an article or help with the below scenario, that would be greatly appreciated. Our LLC is getting ready to list our first fix and flip. For the 2015 taxes we will pay taxes based on our net profit and then if we issue a K1 with some value, we will have to pay taxes on our personal tax returns for that value? Net Profit: $30k After tax (Assume 35% tax): $19.5k Issue a k1 for $5k After tax (Pay personal tax of 28%): $3.6k Does this look right when flipping houses under an LLC and issuing a k1?

[Ned Carey]

@Cory Land  I haven't a clue how you came up with a  K-1 of $5K. 

If the company profit was $30K then the K-1 for each member should be $30K divided by the number of members. (or whatever other breakdown is specified in the operating agreement) Income from flips is considered ordinary income.  The amount on the K-1 is passed through to the members income tax return.  

The "Company" does not pay any tax on the profit. The amount on the K-1 is added to the individuals tax return and taxed at the individual's rate.

This assumes you did not elect to have your LLC taxed as a C Corporation. For Flips there is an advantage to having your LLC taxed as an "S" corp. Talk to your accountant.