I bought it in 2021 and sold it in 2022 for a profit. I assume it will be taxed as capital gains and not ordinary income since it's a one-off flip. During renovations I paid four different contractors over $600 each. I have the SSNs for 3 of them...but am I even required to send any 1099-NECs for an investment property that wasn't a rental and I'm not a dealer? The house was never rented or lived in, just renovated and held for slightly over one year.
Yes. According to the IRS you are required to send a Form 1099-NEC to contractors you paid $600 or more "... when payments are made in the course of your trade or business... .You are engaged in a trade or business if you operate for gain or profit." Buying a house to flip would qualify as operating for gain or profit.
Thanks so much--that's really helpful. Now I just need to figure out what to do for the one contractor who didn't give me his SSN#...he knew I might need it (I told him last year) but now he isn't replying to my emails. :(
@ACtaxpayer , having read through original post and agreeing with the comments/answers by @DavidD66 , just wanted to point out that gains are ONLY given capital treatment if , and only if , the underlying asset was held / owned for ONE YEAR or longer. I hope you have had at least 365 days between the two closings ( buying and selling ). Else the gain will be treated short-term and taxed as ordinary income.