Hello, I am a real estate broker who is in the business of flipping houses. I file using a 1120-S form. I am trying to file my S-Corp return for 2022 using 2022 TurboTax Business (For Corporations, LLC's, etc) desktop version. I purchased a fix and flip in October 2022 and sold it in February 2023.
Can someone please guide me on where I enter my purchase price, materials/supplies, closing costs, etc? My previous 2 flips in 2018 and 2020 I entered under "Rental Real Estate" tab.
However, I have read many different articles on this forum which lead me to believe that I should enter as "inventory" instead. Another article on this forum stated that I shouldn't report the purchase and any expenses paid in 2022 at all but rather to report all of them in 2023, the actual year of sale.
I am not sure whether I should report 2022 purchase and supplies that were paid in 2022 in my 2022 return (which I assume will be capitalized and carried forward to my 2023 tax return adding to my basis and therefore reducing my "profit")? Or should I completely omit the purchase and materials/labor costs in my 2022 tax return altogether and only report them in my 2023 return (property was sold February 2023)? I owned for around 4 months total. Never rented 1 day. Purchased, did rehab work, then sold for profit.
Also, do I leave Beginning inventory $0 and Ending Inventory $0??
Currently my 2022 is showing:
Beginning inventory: $0
Purchases: $499,999 (purchase price of the flip property)
Other Production-Related Costs: $43,519
Less Ending Inventory: $0
Total Cost of Goods Sold: $543,518
Am I entering my flip in the correct section?
Lastly, how do I get it off my balance sheet when I report the February 2023 sale on my 2023 tax return using TurboTax Business? Step by step instructions would be greatly appreciated.
Please help!
