Key Takeaways
- Marketing a property without ownership may constitute unlicensed brokerage in many states.
- Contract enforceability requires proper disclosures, adequate consideration, and assignment language.
- Wholesale fees are ordinary income subject to self-employment tax—not capital gains.
- An LLC provides liability protection, and detailed record-keeping is essential for tax compliance.
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Test Your Knowledge
1.How are wholesale assignment fees classified by the IRS?
2.What risk arises from marketing a property "for sale" without holding title?
3.What entity structure is commonly used for wholesaling liability protection?