Through the pension, the rental income and capital gain are both deferred, but capital gain would be taxed under ordinary income (40%+) once I start withdrawing money from the pension.

In reality they are considered to be an ordinary loss and can be used to offset W-2 income.

On the due diligence period is when you can come back and re-negotiate the contract if something is out of the ordinary.

Just google up irs section 121 and you can read the exceptions.If you sell in less than 1 year.....short terms cap gains, ordinary income tax ratesAfter 1 year, long term cap rates, likely 15-20% (the amount of the gain is added to your ordinary income for the purpose of determining which cap gains tax rate you pay.Your gain is the “profit”...after commissions, closing costs, capital improvements you made less what you paid for it.

The down fall is that when ever you pull money out of the C-corp it will be taxed at your ordinary individual tax rate, whether it is salary or dividends.

It will be taxed as ordinary income at your rate and may even increase your tax bracket.It will be taxed at the state level from anywhere from 4.00% to 8.82%.

That tax rate is your ordinary rate, but its currently capped at 25%.

All ordinary income reported on page one of the 1065 and subject to SE tax.

The corporation pays taxes on its income and then you pay taxes (capital gains or ordinary) on the distributions you receive from the C Corp.

Jeff S Na If your investment strategy is to buy and sell for profit, it does not matter how long you hold the properties before sale -- the sale profit will always be ordinary income (subject to self-employment income taxes).