ANYONE Been Hit With Dealer Status?
I am curious. I keep hearing about dealer status but wonder if anyone has had properties tagged as inventory?
I have both rental and flippers. I am trying to avoid the self-employment tax. How aggressive is the IRS on this issue?
Thanks,
ItzMe
Now that you have posted your question in a public forum, and have also suggested that you have not been taking the correct tax treatment for your flips, I am sure that the IRS agents who also visit this site will become more aggressive on this issue as far as your return is concerned.
There is no designation of "dealer status". At some point in time, the IRS does not come along and say "Henceforth, you are a dealer".
Instead the IRS looks at your pattern of past activity and says your past transactions were dealer dispositions. They recharacterize your past transactions, recompute your tax returns, add up your back taxes, add penalties and interest, then they ask "How will you be paying your bill?"[ Edited by DaveT on Date 02/25/2004 ]
Instead the IRS looks at your pattern of past activity and says your past transactions were dealer dispositions. They recharacterize your past transactions, recompute your tax returns, add up your back taxes, add penalties and interest, then they ask "How will you be paying your bill?"
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Dave thanks for the reply.
OK then I rephrase my question. Has ANYONE had their past transactions recharacterized as dealer dispositions?
Thanks,
ItzMe