Since the S-corp is in the business of flipping houses, the costs incurred in 2022 would be recorded as purchases/other costs in the cost of goods section as you show. Because the house was not flipped until 2023 the ending inventory for 2022 would be $543K. What you are showing would result in IMPROPERLY taking a deduction in 2022 for the$543K even though it wasn't sold until 2023. Then in 2023 your starting inventory is the $543K and since it was sold, the cost in ending inventory would be zero. this is how it gets off the books and properly expensed in 2023
I don't see how you cannot record the costs as inventory in 2022 and yet keep the books in balance. The $543K had to come from somwhere.
