Ever since William Nickerson wrote his classic “How I Made $1,000,000 in Real Estate”, folks wanting to work from home have been enamored with the “creative real estate” opportunities.
Nickerson bought undervalued properties, fixed them up, rented them for a profit and reinvested his profits.
That’s a far cry from what today’s “gurus” teach.
“Flipping properties” is one of the popular techniques today.
It’s easy to read a rah-rah real estate book and THINK you know what you’re doing.
The IRS says “Not So Fast”…
From RealEstateJournal.com…
The trouble, tax experts say, is that people don’t understand the rules. Many trust the advice of real-estate brokers, who often aren’t well versed in tax law. Some amateurs are buying and selling properties too quickly, running the risk that the Internal Revenue Service may deem the transactions a person’s trade or business, with gains taxed as ordinary income and subject to self-employment taxes.
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