The wholesaling was a business activity, and the 2 CPAs I asked said that it is definitely a tax write off.My reason for asking is: I don't have a LLC/corp associated with my rental business, so would this wholesaling campaign be included as expenses for a property that was purchased subsequently to it?

Currently living in apartmentWorking full time as a management consultant and also in grad schoolLiving below our means and currently building savings for emergency fundsBlessed with a promotion that will allow us to build savings at a faster rateEstimate to have $30k in savings in 12 months time (depending on how well I control my Chipotle cravings :) )Plan for first property acquisitionfirst property will be primary residenceFind distressed / REO property (4/2/2)use FHA 203k loan to roll in rehab cost and put 5% down (heard doing 5% instead of 3% means no PMI, need to verify that)Plan for investment property acquisitionsAssume rehab yields 25% ARVUse HELOC and savings to purchase first and subsequent investment properties as soon as possible.Overall I'm looking to force equity in a primary residence and use HELOC and savings to start acquiring properties.  

Probably five times a year I encounter someone that read blog posts about the wonders of LLCs, who subsequently shoved all their assets into an LLC, who then (depending on their income and DTI) cannot get a fannie/freddie mortgage for two tax years because they didn't check with their lender first.So they have to purchase using 10% interest from a hard money guy instead of say 4.375% from a conventional lender.

And I am fully aware that if done correctly this is not an easy money enterprise.

It's actually less than any commissionable mutual fund since this commission is payable only in the first year, not subsequent years as is the case with the majority of equity investments.

I, for example, do not allow rentals in my communities of any kind, and I certainly would not let you buy a home in my community and resell it either for cash or seller finance without my prior approval of both you and the subsequent owner.

"Risk taking generates growth by moving resources to enterprises which create future jobs and consumption opportunities.Without stable and transparent economic roles that allow and encourage a reasonable return for risk taking, growth will not occur, as even wrong entrepreneurs will refuse to take risk.Low interest rates do not encourage creative risk taking, but create just more highly leveraged investments in low risk instruments.

We've also referred close to 2 million in listings and subsequent purchases.I'm not sure if there are laws or ethics involved, but at this point I certainly want to start knocking off some fees.Originally posted by Tom T.

The question is how do you treat and report a sale, exchange and subsequent purchase when the legal ownership differs from how you have been treating and reporting it for income tax purposes and would the IRS or state audit agency agree with that. 

We always use our attorney to submit the contracts we have to the contractors attorney.Any & all draws are subsequently approved through the attorney after each sub-scope of work is completed to our satisfaction.