How to report profit from a "flip" that I never owned?

[Michelle Marshall]

How do I characterize/report the proceeds from a "flip"  in that I never actually owned?

Last year I loaned my best friend money to get out from under her house. I loaned her money up front to move out and get settled in her new place. I also loaned her money to cover the costs of the repairs and upgrading the house, to include her mortgage.  To secure the loan I filed a second against the house and once the house sold, I was paid out from the escrow company.

I did not receive any tax forms from the escrow company, but didn't believe I would.

I did charge her interest but how do I report the amount that I was paid out from escrow on that is above what I loaned her? In H&R Block the only place that appears to apply for me would be "other income" and which will be taxed as ordinary income.  This isn't about avoiding taxes, I just want to make sure that I am capturing it in the right place.

I don't own a business. My expenses are strictly what I paid for materials and for services to have the work done. I didn't intend to flip, and most definitely will never touch a flip again. So I don't believe I need to consider this self employment and also pay self employment tax.  But would I want to consider this in order to use the 20% pass through benefit and then expense things like mileage and cell phone?  

Also, not sure if it matters, but the amount I made after expenses is greater than the gift allowance.

Thank you!

[Eamonn McElroy]

@Michelle Marshall

Sounds like a debt instrument.  Generally interest from loans and notes is ordinary investment income and gains would be capital in nature (STCG or LTCG).

I'm not seeing how you "flipped a house" here?  Only loaned money?

20% QBI deduction and expensing mileage and cell phone is available if your activities rise to the level of a 'trade or business', which requires continuous, regular, and substantial effort.  Doesn't sound like you have that here...

Make sure to run by your CPA.