Common tax deductions for house flippers

Tax season officially starts in a few days (Jan 27th)! As an investor and/or business owner, do not be in a rush to file your taxes until you have gathered sufficient documentation to take advantage of the maximum deductions.

If you are a house flipper, you can only deduct the costs directly associated with your properties on the year they are SOLD. General business operating expenses are deducted AS INCURRED.

Common costs that are deducted when properties are sold:

• Purchase price

• Closing costs

• Wholesale fees

• Holding costs (interest, taxes, utilities, insurance)

• Renovation costs (permits and legal fees, contractor costs, inspections, supplies and materials, etc.)

Common general business expenses that are deducted when incurred:

• Advertising

• Office expenses

• Education and training

• Business insurance

• Cell phone/internet

• Any costs unrelated to a specific property

For more real estate tax tips, book an appointment with us at www.lobecpa.com and we will help you tax plan and build wealth!