I read an accountant’s story of a client who purchased a $40,000 “house flipper plan” through a seminar buy hasn’t flipped a house yet. I’m guessing that 2017 isn’t looking too good for that strategy. The business has no income, only losses. Now it it time to file the first tax return and the client insists that the tax advice included in expensive package purchased is right because it was so expensive and presented so convincingly.
Actually, the tax preparer is accurate on the advice even at a tiny fraction of the price. I find that taxpayers often make the mistake of heeding advice other than their tax preparer based on the position of that person (someone powerful or famous) even if that person has no knowledge of the taxpayer’s specific situation. Similarly, now physicians report that patients sometimes believe what they read on websites like Webmd or TV shows like Doctor Oz, for example, more than personal advice from their doctor. It is important to understand that the motives of a seminar seller, web site or TV producer are different than those of a personal professional adviser.
The best advice the investor could get is to read these articles:
In short, the people making most of the money in house flipping are the ones selling the seminars. They are not responsible for your taxes nor are they required to provide personal and accurate tax advice. With the expected 2017 slowdown in the residential real estate market under the new federal leadership, now is not the time to make bets in house flipping.