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lambeauman

tax question about title flipping

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I am interested in getting into title flipping and am wondering how it works when it comes to the closing. Do I report the profit as income and if so about how much would be taken out for taxes? If it makes a difference, I live in Wisconsin.

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Is "title" flipping the same as flipping the property?

 

If so, then for your federal income taxes, report your flip profits on Schedule C (1040) and use Schedule SE to compute your payroll taxes.

 

Flip profits are taxed as ordinary income at whatever rate applies to your tax bracket. Payroll taxes are 15.3%, but you get to take a credit for half of that amount on your 1040.

 

As a general rule, if you are a resident of the state in which the property is sold, no withholding deduction is required. If anything is deducted at settlement depends upon your local practices in WI.

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