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Updated about 6 years ago,
Capitalizing flip expenses
I'am relatively new to USA flipping business but have a strong experience in other countries with a different kind of accounting/tax systems . I have looked through the search but have not found something corresponding to my case.
For now i don't have W-2 or any other income. 2020 will be the first year i 'am doing my return for 2019. I'am closing on a flip in couple weeks in my personal name. I will have direct and indirect expenses with the house. As i get it the direct expenses (purchase, taxes, insurance, reno costs, etc) are go attached to a flip and deducted while sale takes place id est capitalized with the house. My issue is with indirect costs (mileage, mobile, office etc) in this 2 months to come. Can they be attributed to the house expenses and be deducted in 2019 or they should be wrote off in 2018? The logic and my other experience says yes you can capitalized them as well. But reading IRS publications doesn't shed light so logic and IRS not always come together.
Please share the actual experience (advice to get a CPA can be omitted)