I am in the final stages before sending out my first mailer and am trying to calculate estimated short term capital gains based on 10, 20, 30, and 40 transactions with fairly consistent profit margins (estimating buy at 20%/sell at 60% of market value). If the numbers I am looking at are correct, then there is a large chunk of change to be paid in taxes which will slow my growth. The first question is can I claim profits as business income as an individual as opposed to capital gains when buying and selling land? With short term capital gains being taxed at the same rate as normal income at the federal level (not to mention adding on the state capital gains tax), I have a few questions:
1. What are some strategies to mitigate the amount of capital gains taxes paid?
2. At what point do you stop rolling all profits back into mailers and purchase funds to avoid paying this tax? (I believe there is a 45 day window to roll profits back into the business, correct me if I am wrong)
3. Does someone have a system they would be willing to share that has worked for them (lessen taxes but still able to “pay yourself” early on)?
Ultimately I am trying to do this without taking on a large tax burden at the end of the year if there is a way to avoid it. I apologize if this question has already been answered. Thanks in advance for the help.
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