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Updated about 6 years ago, 10/11/2018

User Stats

1,254
Posts
342
Votes
Rich Hupper
  • Broker / Investor
  • Tewksbury, MA
342
Votes |
1,254
Posts

Two flips this year how to avoid self employment tax

Rich Hupper
  • Broker / Investor
  • Tewksbury, MA
Posted

Hi

I bought two properties this year and sold them for a profit. It is my understanding the profit from those flips will be treated as active income and subject to self employment tax. However I didn't even lift a finger to "flip" the property. All i did was buy the property and pay contractors for the work they did. All of my income this year was 1099 income from commissions except the two flips.

Are there any creative ways to avoid self employment tax on the flips by turning the profit from those flips into passive or portfolio income?

Thanks

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