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cmmurra
New Member

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?

 
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1 Best answer

Accepted Solutions
Hal_Al
Level 15

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?

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/

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7 Replies
Hal_Al
Level 15

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?

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
Level 15

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
Level 15

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?

...
cmmurra
New Member

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?

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
Level 15

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?

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
New Member

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?

Thanks Hal!!!!     So that part is expensed in 2018.    I couldn’t find anything about that.   
Hal_Al
Level 15

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?

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.
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