Tax Implications for Flipping

[Tyler Willson]

Hello everyone,

We are nearing the end of our first rehab and flip project, and I was wondering how we go about writing off expenses for taxes. I was getting fairly clear on how to do it for rentals with division into repairs vs capex, but now I am not sure how to do it for rehabs. I know I should talk to a CPA, and I will, but I wanted to get some info before then.

So in short, what expenses for the rehab can I deduct for the rehab? Please give me a little more than the IRS line that goes like - anything necessary for the daily function of the business.

Thank you!

[John Thedford]

Gross income-all expenses...== net profit....taxed as ordinary income. NO breaks such as depreciation. 

What can you write off? All expenses related to the acquisition, rehab, and sale of the property.