Thursday, February 10, 2022

Tax treatment when flipping a house not sold at year end

 Good client of mine is flipping a house and it is still being worked on at year end.  Tax treatment is to put the unsold house in inventory and NOT to depreciate any of the house.

Either way, if you flip houses that is ordinary income. The flips are inventory and tax is owed on the gain as they are sold. Flips are NOT held as rentals so you don't get any benefits of depreciation.