I purchased a home to remodel and then sell (flipped) where do I show this income and expenses?

[DS30]

If you are in the business of flipping houses, you will report all the income and sales information on a Schedule C as business income from self-employment.

You would want to upgrade to TurboTax Home and Business and you would report all your business income/expense under the "Business" tab (continue)>I'll choose what I work on"> Business Income and Expenses > Profit or Loss from Business > start or update. Let TurboTax guide you in entering all of your business information. You will eventually get to a screen titled "Your () Business.

If you are not in the business of flipping houses, you would report this as the sale of a capital asset because you bought the home for investment purposes. You will add the remodeling costs to the basis to determine your overall gain or loss. You may need to upgrade to TurboTax Premier to report this capital asset sale.

Click this link for further information about reporting the sale of a capital asset

• To enter this transaction in TurboTax, log into your tax return and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below)

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section) (see Screenshot #1)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Select - everything else
9. Some basic information:
1. Description –  Usually the address of the property sold
2. Sales Proceeds – Net proceeds from the sale 
3. Date Sold – Date you sold the property
10. Tell us how you acquired the property - purchased
11. Purchase information - This is where you will enter your cost plus the capital improvement costs.
12. Enter the date acquired.

[zelnio4]

What does this 3rd paragraph mean?:  You will add the remodeling costs to the basis to determine your overall gain or loss

[DS30]

It means that remodeling costs that improve or extend the life of the property over more than a one year period will need to be capitalized. Therefore the full cost of capitalized renovations are added to the cost basis in your property to increase that cost basis. This in turn will lower any capital gain on the sale (or increase any capital loss).

[zelnio4]

I renovated a house.  Got a check for $90,000.  I spent $20,000 fixing it up.  Therefore, do I claim "Net Proceeds" of $70,000?

[zelnio4]

IOW. I flipped a house. Sold it for $90K.  I spent $20K on fixing it.  Do I claim $70K on Net Proceeds in TurboTax?

[rpk1mak]

Reporting the acquisition and sale transactions under Investment Income does not create a 1099-S on which to enter information about the 1099-S issued by the title company at the sale closing.  How is this done?  This is important because I am assuming an unreported 1099-S will trigger an IRS audit??

[sanjay92]

Can you give more info what needs to be entered " Let TurboTax guide you in entering all of your business information. You will eventually get to a screen titled "Your () Business." If we received 1099S for flip property, where that info would go. Under Business Income, I see 1099-MISC, General Income,Other Income, Income you give back). There is no option for 1099-S

[myflippingfamily]

i don't think your answer is correct on those "in the business". the irs just sent me a letter stating i didn't report all my 1099S because there was no way for me to list them all out on schedule C.  I flipped multiple properties, took the total resale values MINUS total purchase price, and ended up with gross revenue.  since the gross revenue matched NOTHING they had, they added tons of 1099s to my total income which was total sales price even before loan payoffs.  this is a mess!

[IsabellaG]

@myflippingfamily, you should have reported the gross sales prices from all of your 1099-S's as Gross Receipts or Income on your Schedule C. Then the purchase price and improvement costs should have been included as Cost of Goods Sold. Then your gross income would match what the IRS has, and your net profit would still be correctly reported. At this point, you'll have to show the IRS your calculations to demonstrate that you actually reported all of your income. It's never a good idea to report your net figures. But as a flipper in the business of flipping houses, it is correct that you report your income and expenses on Schedule C.

[Critter]

@myflippingfamily 

If you had reported the gross sales on the Sch C properly then you could have indicated that to the IRS (who was looking for the amount to show up on the Sch D).   Since you did NOT report the gross income correctly you need to amend your return to respond to the IRS notice.  I highly suggest you seek local professional assistance to get this mess corrected and get education on the proper bookkeeping and income tax reporting for your self employment. 

[myflippingfamily]

again.. i was not an original poster.. i asked the question on multiple OLD threads..  looks like the same as you troll threads.. how exactly did you get to the 20 rating being a douche.  I paid for live support and a cpa but again bc i work flipping houses, im not on my A all day reading threads until now...  I was under the impression there was help here bc I come after normal business hours for CPAs.

[myflippingfamily]

So again this is true and false, bc not every title company reports.. I actually had 6 properties sell, only 2 were reported (1 was my homestead).    Had 3 wholesale deals that i assigned so i never get a 1099 on those at all.. I am a fee so this is what the problem is still.   Thanks for trying to help.. I need to know where I show the LIST of all the properties, because again my CPA also said that even though I don't get a 1099 it doesn't mean I don't report it...  Even though it seems easier if I don't at this point.

[Critter]

ALL  your gross  sales/income from all sources are entered on the Sch C as income ... then you will deduct expenses and inventory costs to come to a net profit on the Sch C .... seems you entered the net income on the Sch C and the IRS could not relate the 1099-S income to the Sch C.  If the IRS does an income audit on your business then they will catch any income you do not report even if you don't get a 1099 for it ... so always report all your income. 

This will require an amended return in order to address your error and the IRS changes.  You REALLY should seek local professional assistance in this matter.   If you use the Turbotax LIVE option that is only operational when the Online version is operational  and the online program has shut down for the conversion to the 2019 program.   

Contact TT support if you have questions on the LIVE option:   

See this TurboTax support FAQ for a contact link and hours of operation -https://ttlc.intuit.com/questions/1899263-what-is-the-turbotax-phone-number

If you already have a CPA then they should tell you what/where/why/how to fill in the Sch C ... 

How do I report income from self-employment?

If you received a 1099-MISC for your self-employed income

Type 1099-misc in the Search box and then select the Jump to link. This will take you directly to the section where you can enter your 1099-MISC. You’ll also be able to enter any cash, personal checks, credit card payments, or cryptocurrency (Form 1099-K) related to your self-employment.

If your self-employment income was only from cash, personal checks, credit card payments, or cryptocurrency 

Type Schedule C in the Search box and then select the Jump to link. This will take you to where you can enter any cash, personal checks, credit card payments, or cryptocurrency (Form 1099-K) related to your self-employment. You may first be asked some general questions about your business. After you answer them, you’ll be taken to the Let's get income for (your line of work) screen where you can enter this income as Additional Income.

Related Information:

• What's the difference between self-employment income and other income?
• Where do I enter a 1099-MISC?
• Why am I paying self-employment tax?
• How is cryptocurrency like Bitcoin taxed?

What if I didn’t get a 1099-MISC, but made money from self-employment?

If you weren’t paid $600 or more, a business isn’t required to send you a 1099-MISC, but you still need to report the income.

To enter your self-employment income not reported on a 1099-MISC:

1. When in your account, select the Take Me to My Return button on the main screen.
2. Type “Schedule C” in the Search box
3. Select the “Jump to” link.
4. Answer the general questions about your business (or select Edit at the work summary screen).
5. At the Let’s get income for…screen, select Additional Income.

If you did make $600 or more, contact the company or individual you worked for.

Related Information:

• How do I report income from self-employment?

Here is some reading material……

IRS information on Self Employment….
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center 

Publication 334, Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf 

Publication 535 Business Expenses
http://www.irs.gov/pub/irs-pdf/p535.pdf 

Home Office Expenses … Business Use of the Home

https://www.irs.gov/businesses/small-businesses-self-employed/home-office-deduction

https://www.irs.gov/pub/irs-pdf/p587.pdf

There is also QuickBooks Self Employment bundle you can check out which includes one Turbo Tax Self Employed return and will help you keep up in your bookkeeping all year along with calculating the estimated payments needed ....
http://quickbooks.intuit.com/self-employed

[b_p_moran]

How do I build a 1065 for my LLC partnership, and generate K-1s for my partner and I in TurboxTax Premier?