How to report a house flip

[Diti]

I tried to flip one house this year and ended up losing money on it (more than 3k). How can I go about reporting this loss?

Do I,

1. Complete a schedule C? Or

2. Report this as an "Investment Income/Loss" which is limited by the 3k investment loss limit? 

I think reporting the loss on schedule C might provide me with the most tax benefit right away, which would be helpful at the moment, but I'm not sure if this is technically correct.

[DoninGA · Accepted solution]

Buying and selling one investment property with no intent to continue this practice does Not constitute having a business for buying and selling properties.

You report the sale of the property in the Wages & Income section of the TurboTax program under Investment Income.

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Under Investment Income
• On Stocks, Mutual Funds, Bonds, Other, click the start or update button

Or enter investment sales in the Search box located in the upper right of the program screen. Click on Jump to investment sales

[Diti]

and what if the intent was to try again in 2023 with another flip? Does that change the tax scenario?

[DoninGA]

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@Diti wrote:

and what if the intent was to try again in 2023 with another flip? Does that change the tax scenario?

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Go to the following IRS website for the 9 factors which you can use to determine if this is a business - https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

[Hal_Al]

For more info, in making that determination, see a similar question at: https://ttlc.intuit.com/questions/3399983-tax-issues-regarding-flipping-of-a-house 

And references at:

https://www.hrblock.com/tax-center/income/real-estate/flipping-houses-taxes/

https://fitsmallbusiness.com/taxes-on-flipping-houses/