Hi, BP fellows,
I started to venture into the flipping world this year and has been successful at my first deal in summer. Now I am doing my second. Unfortunately, I bought both of these properties under my personal name, not knowing that there is a scary thing called "dealer" status that could eat into my profits through self-employment tax.
Here is my situation: I have a day job with good W2 income through which I have already maxed out my self-employment contribution in 2012.
Questions:
1. I am doing flips sort of as a hobby to test out the water. Am I still seen as a dealer by IRS?
2. If I am seen as a dealer, do I need to worry about self-employment tax because I have already maxed it out through my day job?
Thanks for reading and answering my very first post!
Best,
Michael
