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

[RobertG]

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

@b_p_moran

[AlexSA]

@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

[KristinaK]

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. 

[contabilidadmia]

list each income separately...use better software or include in notes...

[KTRAFKA]

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. 

[KTRAFKA]

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.