My husband and I set up an LLC and purchased 3 houses in 2019. We intended to fix them up and re-sell them for profit. However, due to pandemic we couldn't finish the projects. The 3 houses were never rented. In 2022, we sold one of the houses for a loss. How do we report the acquisition costs, renovation costs and the real property taxes and utility costs for these 3 properties in the past 3 years? Is the LLC considered as real estate dealer or investor when we file taxes?
If considered as a dealer, we only sold one house in 3 years for a loss, do we need to pay self employment tax? How do we input the inventory? There are no options in TurboTax for us to separate costs for each property. Do we sum up all of costs for 3 houses?
If considered as investor, the loss is capital loss and we can only claim $3000 per year, right? In TurboTax, there is only one option "Rental Property" that we can put in the property information. But they are not rental properties and there is no place for me to input the renovation costs. How should we do it? Thanks.
We use TurboTax Business version.
