House flip when work and then sale of house occur in different years Do you issue a 1099 and record contractor expense in year incurred or when house is sold?

[Hal_Al · Accepted solution]

You do not report anything on your 2018 tax return, if the house wasn't sold in 2018. Keep good records of your expenses, as they will form your cost basis (or "cost of goods sold") when you do sell it. You do not issue yourself a form 1099.

For more on this subject see https://fitsmallbusiness.com/taxes-on-flipping-houses/

[Hal_Al]

Also see:
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[Hal_Al]

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[cmmurra]

So I don’t issue, say the electrician, a 1099 for work the same year work performed?     Just issue it in the year house sold?     Short hold on house.   Closing ran into january

[Hal_Al]

Yes, you do issue a 1099-MISC to anybody you pay more than $600; e.g. the electrician.  You issue it for the year you paid them, apparently 2018.

[cmmurra]

Thanks Hal!!!!     So that part is expensed in 2018.    I couldn’t find anything about that.   

[Hal_Al]

No. The fact that you are required to issue your contractors a 1099-Misc does not mean you get to expenses the cost. It still part of the cost of the house and cannot be deducted until the house is sold.