Yes, you will record the transaction on Schedule C, if you plan on being in the business of flipping houses. The house is treated as inventory instead of an investment property which would qualify for Capital Gains. So, unlike rental properties, you will need to pay Self Employment Taxes on your houses you flip when doing it as a business. So you should be prepared to make the payment by April 15th.
Although you will be filing a Schedule C, you still cannot deduct the costs of improvements on your Schedule C for 2023. The cost of improvements will not be entered until you report the sale of the house. The materials and labor will be part of your cost basis along with the improvements. So in 2024, your improvements and purchase of the house will be reported along with the sale.
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