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
Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:
What does this 3rd paragraph mean?: You will add the remodeling costs to the basis to determine your overall gain or loss
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).
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?
IOW. I flipped a house. Sold it for $90K. I spent $20K on fixing it. Do I claim $70K on Net Proceeds in TurboTax?
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??
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
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!
@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.
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.
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.
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.
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 ...
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.
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.
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:
If you did make $600 or more, contact the company or individual you worked for.
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
How do I build a 1065 for my LLC partnership, and generate K-1s for my partner and I in TurboxTax Premier?
To prepare a partnership return, Form 1065) and K-1s you will need TurboTax Business.
Go to the following TurboTax website for more information and to download the product. TurboTax Business
@IsabellaG , you seem to have a good knowledge of completing 1099-S for those who are Real Estate Dealers.
1. I am trying to figure out how and where to fill in a 1099-S sent to me from Title company on a house (Property A) that I flipped under my LLC. The gross proceeds (#2 on 1099-S) show a number which is much higher than what i actually earned, because the property still had a mortgage and most of it was sent to the original lender.
This specific property was a flip. But I am not sure where to indicate this, and add all of the cost it took to get it up for sale.
2. [TurboTax Desktop Home & Business (MAC) ... To Clarify, I am under section...
Business > LLC Real Estate Business >> Business Income > General Income > "Any General Business Income?"
Question: If you have income from sales or services not reported on forms 1099-MISC or 1099-G, enter below.
I only see a text box to fill in Description and Amount.
Is there I type in 1099-S and the amount of gross proceeds on box #2?
3. If I have other properties that I sold (Property B-D) , with no 1009-S issued, and its is income I earned from a flip, how and where do I document those?
4. I bought (Property A) end of 2018 and sold in April of 2019. I am not sure what to put under "Your Beginning Inventory for 2019 should be the same as your ending inventory for 2018." There is tick button to push, but not sure as to what I should list. Is there where I type in the Gross Proceeds?
I also don't understand how to differentiate from one flip to an other. Do we add a "New Business" for each property flip that I do under my LLC?
None of these were rentals.
You help, thoughts and advice will be very helpful.
Thank you
Alex
If you are in business and trade of flipping houses, then the gross proceeds from the sale are your gross income, and all accumulated expenses throughout the holding period are your "cost of goods sold" (COGS).
1. The gross proceeds that you see on 1099-S are the total sales price. That is what you need to report as your gross income from that sale. You can indicate that it was a flip in the description (see #2). You will just need to add up all the costs throughout the years (make sure that you do not take it as a deduction in prior years) and add them as COGS.
2. There is no separate place to enter 1099-S. Where you've indicated is the right place. In the description, you can put "Flip income".
3. You will report it the same way as property A. See #2.
4. Your beginning inventory for 2019 is the ending inventory for 2018. And that should be the costs accumulated for the property in 2018: purchase price, purchase costs, repairs, insurance, etc. Then you add the costs for 2019 as purchases and enter the ending inventory. The ending inventory is what you had on hand as of 12/31/19 (houses plus expenses for them). The program will then calculate your COGS. Sales price (from 1099-S), less your COGS will give you net income.
5. No, you do not need to do "new business" for each property. Think about it the same way as selling lemonade. You do not start a new business for each glass of lemonade sold.
list each income separately...use better software or include in notes...
When you are in the business, you will report your income and expenses on Schedule C - you are considered self employed. When you show your gross income - that information would come from the proceeds of the sales which would come from your 1099 S. The expenses are recorded in the year they are paid and your income is reported in the year it is received.
When reporting on schedule C, you will be reporting the total of your income. Keep supporting lists and details for you to explain how you came up with your totals. If a form was received 1099S when the property was sold, thenn enter that as part of your income using that document to show the details. Also include the income received on properties where no form was received. You will not be listing the property information for those properties since there was no form was received; however, the income would still be reported as part of your gross income. Example would be - if you sold 5 properties, received 2 1099S forms, then you would be inputting the forms received, then adjust your total income to include the total amount received upon the sale of the properties for which no form was received.