The facts are as follows:
- I bought a house in September of 2021 for $250K with the intention to make major rehab repairs and then flip. This house was in a really bad shape and needed a lot of work.
- I was finally able to evict the inhabitants of the house in September of 2022.
- I started making repairs to the house in January of 2023 and finished everything by September of 2023. My total cost in the house from September 2021 to September 2023 was $200K.
- I did not take any depreciation on this house or any tax deductions.
- I hold a real estate license and I am a part-time realtor and I spent a lot of time in selecting the contractors to do the work and also did some of rehab work myself.
- I sold this house in September 2023 for $500K; thereby making a gain of $50K.
My questions are as follows:
- What is the correct step by step process to get this entered in Turbo Tax and also what is the correct tax treatment for this?
- Is my gain $50K? My thought process was that I could include all my expenses on this house since I bought it in September 2021 to finally selling it in September 2023. In addition, given that I did not take any depreciation or other tax deductions for my expenses since when I bought it then my cost basis in simply all my expenses without any recapture adjustments etc?
- Would this information simply go in Part III of Form 4797? And in the description I can call it "Rehabilitation and Sale of House"?
Thank you in advance for your help!