@EllenHarr wrote:
set up an LLC and purchased 3 houses in 2019. We intended to fix them up and re-sell them for profit.
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?
I view it differently than Mike. Your intent was to fix up and sell three houses. In my opinion, that is a business. of flipping houses. Setting up a LLC and filing a Partnership return seems to support that idea.
The pandemic is mostly over (for the most part) - is there a reason why you can't fix them up and sell them now?
You would owe self employment tax on the profit. If there isn't a profit, there is no self employment tax.
For inventory, you report the the starting cost (all three houses) and the ending cost (the two remaining houses). Then effectively the cost of the one sold house ends up being a deduction against the income.
