How to file taxes on an investment property paid in cash.

[Jimmy P.]

So this summer I bought an investment property with cash. I paid for everything with cash including a total rehab of the property. The property has just now been finished so I didnt have any rental income or anything like that from it.

What I am wondering is can I deduct the amount I put into the property? Partial amount? I do not do this full time or have an LLC or anything like that. I also live in Michigan if that matters. Thanks a lot guys and gals!

[J Scott]

Originally posted by Tim Delp:

If you are planning on flipping then I believe they will most likely use your selling price minus your costs basis for establishing your capital gains you owe

If you're flipping, the properties and any costs associated with the rehab will be consider WIP and go into inventory. When you resell, it will be ordinary business income (subject to SET), not capital gains.