Newbie Needs Tax Help

[Mike Bayer]

Hi everyone,

We bought our first property last november in 2023, and are getting ready to list it.  I purchased it under my own personal name on this first one, cause we were competing to get there quick and my EIN hadn't come in yet.

We do our own taxes but I have no clue what to put for this house purchase.  We still own the house now.  But how do we put this into our tax filing for last year?  

Any help would be much appreciated.

[Benjamin Weinhart]

Hi Mike, the simple answer is that you ignore it for right now for a depreciation standpoint at least. Once you list the property for rent, you'll be able to start to take depreciation on it. As far as expenses for things such as electricity and RE taxes (paid in 2023), those will generally be deductible on Sch E. Given that you have no income, and it's likely you may not meet the material participation threshold for 2023, the loss would then be kept on form 8582 to be used to offset future years of income from the property in the form of a "carryover loss"

[Jonathan Bock]

@Mike Bayer

For sale or lease?  Just to clarify 

[Mike Bayer]

We will be selling the house

[Benjamin Weinhart]

Quote from @Mike Bayer:

We will be selling the house

 Ope, please disregard my earlier post then, I mistakingly assumed it was a property to rent. You'd want to report this activity on Sch C instead since it's a different type of business activity. Report all of your expenses as you would normally that were paid during 2023. The income from selling the home will be reported on your 2024 tax return. This is assuming the "we" is a husband/wife duo and nothing that would give a bit more complexity such as a partnership. If it is a partnership/S-corp or a state that won't allow a QJV, then you may want to file an extension & talk to a tax professional who can help you navigate through this as that would introduce a lot more complexity into the mix.

[Account Closed]

Did you sell the house last year? Did you move somewhere after Nov 2023? A bit is missing here, I would suggest syncing up with a real estate-focused accountant to do it for you to avoid headaches and mistakes made! 

[Teri Feeney Styers]

I have flipped many houses. I am an S-Corp but that doesn't really matter in this scenario. For now you do nothing. Just keep all your financial records regarding the purchase, improvements, holding costs, etc. The year you sell the house (presumably 2024) you report ALL the profit and loss. Simple. This is "ordinary income" and you will show it on your personal tax return. Don't try to write off any expenses until you have an income to offset. Much cleaner. @Mike Bayer

[Basit Siddiqi]

Getting an EIN is normally instant

if you own the home personally, and it is a rental property, it would go on your individual return.