Flipping house for LLC

[jscolucci]

I am an LLC single member.  I bought and sold a home for flipping purposes in one year.  Where do I report that on my schedule C?

[LeticiaF1]

If this is going to become something you will be doing more regularly, then it would no longer be considered passive investing and would become "active income."  If this is the case flipping houses is now a business that has to be reported as a business and the profit is subject to self-employment tax.  If this is the case then the income would be reported on Schedule C, unless you have a partnership or become a corporation.  To enter your information:

1. Login to your return
2. Continue with the section Wages & Income
3. Go to self-employment income

The sales price for the house can be entered as gross receipts or sales. For the expenses, I would recommend that you add all of your home expenses and enter the total cost as COGS (cost of goods sold) on your schedule C.  Costs that can be included are:

• Permits
• Materials
• Labor
• Disposal
• Professional Cleaning
• Appliances
• Professional Photography
• Home Staging
• Advertising
• Maintenance fees and HOA Dues
• Some closing costs like real estate taxes paid at closing, loan origination fees
• Mortgage interest 
• Cost of purchasing the house 

Any other expenses related to the business can be entered on your schedule C, things like office expenses, tools, and meals to meet with potential clients.  

When selling properties most expenses need to be capitalized into, which means they have to be added to the basis of the property.

If flipping homes is not something that you are planning to do regularly, you can report the transaction as a capital transaction (Form 8949/Schedule D). To report this on TurboTax:

1. Login to your return
2. Continue with the section Wages & Income
3. Scroll down to Investments and Savings
4. Under this section select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)

For more information on Schedule C, and capital gains, see the TurboTax articles below:

What Is a Schedule C IRS Form?

Guide to Schedule D: Capital Gains and Losses