Here's what I wrote here last June:Originally posted by @David Krulac:@Bryan WellerI don't like LLC, INC names that mimic the owner's name, like:Bryan Weller LLCWeller Real Estate LLCI think that the company name should be completely different from your own name, even Bryan and Bob LLC is something I don't like.From the IRS prospective there is always the question of dealer or investor, which often equates to being Federally taxed at long term Capital Gains rates or ordinary income at double the taxes. so your name should not state or imply that you are a dealer like:Day Trading Real Estate LLCBryan's Buying & Selling Real Estate LLCBryan's Flipping Homes LLC.Another thing that happens is that the nature of your business might change and now the specific name you pick does not apply likeRehabbing Chicago LLCThen you stop rehabbing or stop working in Chicago, once you move to Milwaukee or even Skokie and only do rentals the name Rehabbing Chicago doesn't make sense any more and will confuse people.I'm not as bothered by this one but have seen people that have names that don't quite fit or don't fit yet like:Worldwide Real Estate LLCGlobal Real Estate LLCTranscontinental Real Estate LLCActually met a couple of people with names like those who didn't own any real estate.

He did, however, get to deduct that interest payment.)So you can see that even though there is no ability to roll Roth IRAs to 401Ks, you can still use your traditional monies to generate ordinary income.

So, this only has a chance of working with an ordinary sale from an individual.

Thanks Brit and Nathalie!

Its ordinary income and subject to income tax at your marginal rate. 

@Brit Foshee appreciate the advice.

Joe - After running the numbers on the self-employment tax implications of flipping, based on what I've been reading on biggerpockets, it seems that an s-corp is the way to go in order for some of the profits to be taxed as dividends instead of ordinary income. 

If they go in with you as an equity partner, the time frame still doesn't matter and they are just taxed on the profit as ordinary income.

Flip income in never treated as capital gain, it is always taxed at ordinary income rates.

However it would also need to match the ordinary and necessary provisions.