Form 1099-s as Schedule C income

My son-in-law flipped 4 houses last year. One under his name and SSN and 3 under his new LLC and EIN. He received 2 1099S (1 under his SSN and 1 under the EIN). He has to report the income on a Schedule C, but do I also need to include the 2 1099S as a sale on form 4797 and D. He did not receive a 1099S or other tax form for the other 2 sales (the LLC was supposed to be a SCorp but wasn't). Any help would be appreciated as he has a major mess this year.

421

Expert Alumni

Mar 14, 2023 4:07:31 PM

If he flips houses they are considered inventory rather than assets so he can enter all the income on the Schedule C as Business Income not reported on a 1099-NEC. He will NOT enter in the personal section. Any expenses will go here as well- and he can enter the purchases prices of the houses to decrease his taxable income. In general, flippers cannot use capital gains rates.

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Form 1099-s as Schedule C income