@gungley wrote:
Thank you for your answer. I asked this question below but wanted to add that I am a RE Investor, not Dealer in a 2 member LLC filing a form 1065.
If we issued a 1099 to a non-corporation worker (landscaper, drywaller, etc) in 2024 but haven't sold the house yet, do we list the amount the 1099 was issued for anywhere on the 2024 taxes or do we wait until we sell it and add it to the cost basis?
Thank you.
It depends on what work was done. Expenses are expensed in the normal way. Improvements are added to the basis and depreciated when they occur. How you file for 2024 should not be affected by what you might do in 2025.
For example, if you paid for a new roof, that is an improvement that you list as an asset and begin depreciating. Just because you plan to sell the house in 2025 doesn't change that you would list the improvement and begin depreciating it in on your 2024 return.
