ILLMAS Posted October 15, 2015 Report Share Posted October 15, 2015 A fellow tax preparer friend called me with a question that caught me off guard, he has TP that bought a house in 2014 to flip, house was sold in 2015, his question was if he should capitalized the property in 2014 and what ever improvements they made in that year?I was a bite confused and suggested it can be reported it on Sch C as inventory or even on Sch E but no depreciation allowed, now I am second guessing myself. Can anyone help me on this one.Thanks MAS Quote Link to comment Share on other sites More sharing options...
Possi Posted October 15, 2015 Report Share Posted October 15, 2015 I wouldn't put it on a C, he is not employed by flipping this house.I wouldn't use an E, it is not rental property.The Sch D is the only place I would have put it. It is clearly investment property.I don't usually chime in, so wait for another opinion. 6 Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted October 15, 2015 Report Share Posted October 15, 2015 A one-time only house 'flip' - in this situation I'd also utilize Schedule D. 5 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted October 15, 2015 Author Report Share Posted October 15, 2015 Thanks, you are absolutely correct, I am sure glad I asked. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted October 16, 2015 Report Share Posted October 16, 2015 The costs are capitalized, just not on the 2014 tax return. Quote Link to comment Share on other sites More sharing options...
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