We started a house flipping business last year. We bought a property and did improvements late 2019, and sold the house early 2020. Our contractor was paid Nov/Dec 2019.
Since 2019 didn't generate any income for our business, can I carry forward this 1099 expense and add it to the basis of the house sold in 2020? Or do I consider it a loss for 2019, and carry that loss forward? Basically I'm not sure how to deduct the 1099 expense in 2019, and apply it to the profits of the house sold in 2020.
Thank you! Hope that wasn't too confusing 🙂