Murky waters – Distinguishing between an investor and a dealer for tax purposes

Description

Abstract: Someone who deals with real estate transactions on a regular basis may wonder why it’s necessary to make the distinction between being an “investor” as opposed to a “dealer.” But that distinction is key in the eyes of the IRS and can have a significant impact on one’s tax bill. This article discusses why, and explains how the IRS and the courts distinguish between an investor and a dealer for tax purposes.