Deductions & credits

It depends on whether you are "in the business" of flipping houses for a profit or if this "flip of a house" was just an investment property.  If you are in a business of flipping houses, then all aspects of the sale will be reported on form Schedule C, Profit or Loss From Business.  On a Schedule C, you will report the gross income as your sales price and the basis will be your cost.  A net profit from a business reported on Schedule C is subject to self-employment taxes (for example Social Security and Medicare taxes) as well as the applicable income tax.

In contrast to Schedule C, if the house was an investment property, then its sale would be reported on Schedule D.  In this regard, here are the steps to follow when entering the sale into TurboTax:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section) (see Screenshot #1)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Select - everything else
9. Some basic information:
   1. Description –  Usually the address of the property sold
   2. Date Sold – Date you sold the property
   3. Sales Proceeds – Net proceeds from the sale 
10. Tell us how you acquired the property - purchased
11. Purchase information - This is where you will enter your cost plus the capital improvement costs.
12. Enter the date acquired.