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Is this a case where there is separation after June 30th and some years may be filed as "Single" Either way, I would just paperfile and mark it "refused to provide" Rich

Completely agree with these statements. I think there are very few gray areas; I actually study until areas are not gray to me. I think that's part of my job. I believe the activities of the clients in the examples in this thread show active participation in a trade or business and are subject to SE tax. They are rehabbing houses, just like my older son rehabs cars. It seems that clear cut to me. The article Max posted is excellent, and I might be a little too strict sometimes. I will just add that if you truly believe you have a tossup, and you're letting your client decide how to report a flip, you need to make sure he knows how Social Security benefits are figured.

Is this a question about "Audit Risk" The answer to that one is easy. There isn't a lot of it anymore. But I still sign the return based on what I know and what I believe to be what is right. And I find out what the real questions are on the return and then deal with those issues until I am sure it is ok. The original issue here, is a simple one, Dealer or Investor. Your client did three flips. Does the client currently own other properties or owned other properties? There is no bright line test in the code. Too keep it simple, I would put BOTH on the return. Take an amount from the gross sales, say 10% or 5% and that is the commission to do the work as a flipper on the Schedule C with appropriate operating expenses.. (SMR, Ins, M&E, etc.) of making the deal happen. And then the Schedule D has the house sales less acquisition, remodel and selling expenses. That is what you would do if someone was in the business of doing flips, remodels, renewals or rentals. Rich

GGRNY: Lots of preparers do not have a clue how to prepare a return above the most basic returns. The rules changed in the past two years and now we are required to provide a basis worksheet with every K-1. Not that the IRS is going to do anything with that info.... IF this is your only S-Corp, then I congratulate you on paying attention. Rich

This topic usually ends with someone being 100% sure everyone else is wrong.