Self Employed with rentals, and now a flip house

[Lucky B.]

Hi All, I would like to get some help on how to best achieve my goal of flipping a property with the lowest possible  tax burden. I recently bought a home, and I had plan to resell it, until, a friend mentioned something about " dealer status" . I did not know about it since i was just a buy and hold investor.

I have two properties that i have been renting for 4 years, and they are all in my personal name, no LLC. I know many of your will scream at me for doing this so long, but i just never got around to putting those rentals in a LLC. My intention was/still is to flip this newly acquired property, so i put it in a newly formed LLC. So as i read about " dealer status", it seems like it would be best to have an S-Corp. Now the problem is i am a sole member LLC, and i did not elect S-Corp when i filed for a FEID # on the IRS site.

1. Can i go back to the IRS and update my LLC into a S-Corp ?

2. How do I distribute the profits ?  I understand that most people pay themselves a little salary so that they will only get hit 15.3% SET on part of the profit. Need clarification here.  

3. Will i lose depreciation on the other properties ?

I am self employed so no matter what i pay the 15.3 percent on my regular job.