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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: I don't think it matters a hoot.... Posted by jenv on June 24, 2003 at 3:12 AM In Reply to: Re: I don't think it matters a hoot.... posted by Lughead on June 16, 2003 at 8:59 PM : don't know that dealer status applies to notes - might want to ask a CPA - if it could please put a post for the rest of us It does, but probably not the way you think. If you buy a note at a discount, and it is paid off (*not* sold) for more than you paid, the profit is considered portfolio income. It is taxed at the same rate as ordinary income, but no SE tax is owed. You never receive long-term gain treatment. These transactions are not dealer activity, they are considered investments. However, if you buy and sell ("flip") these notes, then you are a dealer in notes, making the profit subject to SE tax. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : don't know that dealer status applies to notes - might want to ask a CPA - if it could please put a post for the rest of us : It does, but probably not the way you think. If you buy a note at a discount, and it is paid off (*not* sold) for more than you paid, the profit is considered portfolio income. It is taxed at the same rate as ordinary income, but no SE tax is owed. You never receive long-term gain treatment. These transactions are not dealer activity, they are considered investments. However, if you buy and sell ("flip") these notes, then you are a dealer in notes, making the profit subject to SE tax. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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