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211. When Are Real Estate Investors Subject to The 15.3% Self-Employment Tax?

Tax Smart Real Estate Investors Podcast

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IRC Section 1402A

The IRS defines net earnings from self-employment and the sub paragraph one says that there shall be excluded from self- employment tax, all rentals from real estate. But rent you receive from real estate held for speculation or investment is not subject to self-employment tax because you wouldn't be a real estate dealer at that point. So kind of muddies the water a little bit, right? Makes it a little confusing. Even if I'm not an estate dealer, I'm doing a lot like tenants are coming because they want the service because I'm giving them all this extra stuff. Is that coming the right way to think about it? Right.

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