All Forum Posts by: Michael Gao

Hi,

I am currently doing flips as a husband and wife team. I "hire" my wife to do research for me on deals and I make offer to close the deals and hire GC to do the fix work for me.

This year, I opened a "Keogh profit sharing plan" (solo 401k) under my name at Fidelity for both of us for tax deferral contributions. AFAIK, there are two components in solo 401k deferral: a) salary deferral by the "employee" and b) profit sharing by the "employer". However, I am not sure how to split the profits between us for the purpose of contribution.

What's a reasonable split? If someone has an example, that would be great!

Thanks!
Michael

I usually delegate all my renovation work to a general contractor I trust. Can I do this under Solo 401k?

Got it, Steve. Would you please recommend some legit and low-cost solo 401k providers? Thanks!

Thanks, Steve. Can I roll over my Roth IRA/day-job 401k money over to solo 401k? Or solo 401k money can only come from self-employment income?

Is it possible to acquire a property using a Roth IRA and then fix and flip it to avoid income tax?

Thanks, Steve. As a newbie, this is a very important clarification for me. Basically "distribution" is taxed as normal job income, but without the FICA tax. It's neither dividend, nor it is capital gain.

Thank you so much for chiming in, Steve. I will dig into the links you provided.

BTW: When you said "You should set up the S-corp in the state you are in", did you mean the state I am a resident of, or do you mean the state where I am doing the flip?

Also I have already bought my second project under my personal name and working on it. Is it too late to set up a corp for this deal? Or can I deed it over and sell it and take the profit under the corp's name?

Thank you guys. One quick question: is the flip profit, done in a personal name, treated as short-term capital gain or normal (self-employed) job income?

Having an entity makes a lot of sense! Thanks!

Do you guys think I can structure the S-corp myself through so DIY site? Or do you think I should have some CPA/lawyer to do that for me? If I need to go with professionals, what's the best way to find a good guy?

Thank you so much for the reply, Jon and Will. S-Corps seems to be the way to go!

I live in CA and doing flips now in NV. Do I need to setup the S-corp in NV or CA? Also once I setup this S-corp, can I deed my current flip project (being renovated now, but purchased under my personal name) into the S-corp and still get the S-corp tax advantage when I sell this house?