View Full Version : Capitol Gains for Corporation question

12-15-2005, 01:49 PM

I recently started a LLC and am in the business of buying and selling Real Estate for profit. My question is how do I calculate the corporate taxes?

Since the corporation will own the properties for less than 1 year do I deduct my capitol gains tax per each property after each property sale (just to be on the safe side) or will the corporation be taxed based on its profit at the end of the year after salaries and other expenses are paid by the profit obtained through the sale of these properties?

Are capitol gains taxes treated differently than other taxes in this respect?

Thank you,

04-06-2006, 04:59 PM
I'm confused when you call your LLC a corporation. Actually, an LLC is automatically taxed like a sole proprietor/partnership. Did you file a special IRS form 8832 requesting that it be taxed like a corporation?

If your LLC is taxed like a corporation then you will file a form 1120 for your anual tax return. You will make quarterly tax deposits to the IRS by filing a form 941 every three months.

Judging from the form 1120, it appears that capital gain net income is treated as taxable income. From that, payroll and other expenses are deducted to arrive at the company's Taxable Income.

In answer to your question, you are probably right to deduct the capital gains at the time of sale, since you are going to be estimating your taxes with form 1120-w and depositing quarterly payments with form 941.

Hope this helps.