Capital Gains Or Income?
Hi all,
I purchased some mortgage notes at steep discounts, and within the year, a few of the notes paid off, leaving me with several thousand dollars in profit. I did this through a single member LLC.
One CPA says the profit should be taxed as income, another CPA says the profit should be taxed as capital gains.
I would love some input as to which is correct, and why.
Thanks in advance!!
Amanda
What is the business purpose for your LLC?
The business purpose is ideally to limit liability, and keep the notes out of my own name.
It seems to me that your business activity produced ordinary income.
Thanks, NewKid.