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Level 2
October 24, 2021
Question

A flip from an LLC

  • October 24, 2021
  • 2 replies
  • 25 views

Background:

 

I bought a distressed house in 2019 that I contracted a third party to do the rehab, those funds were paid from my personal account.

 

In 2020, I opened a passthrough LLC and I opened a bank account under the LLC name. A few weeks later I transferred the house to the LLC and then sold the house at a substantial profit, the funds were deposited into the LLC bank account.

A few weeks later, I purchased another distressed house and a truck using the funds from the sale. 

 

The truck was purchased exclusively for business use (for hauling things that don't fit in my car) 

 

in 2021 the last house is now a rental.

 

How do I report this on my 2020 taxes?

2 replies

Critter-3
Level 15
October 24, 2021

Unless you incorporated the single member LLC is a disregarded entity  so the flip will go on the Sch D and the current rental on the Sch E. 

 

As for the truck ... what are you doing with it now ?  You really don't have a business against which you can deduct the costs from ... so did you sell it already?  Or are you planning on doing more flips ?  

Level 2
October 24, 2021

Planning on more flips, I have a regular car for personal use.