Tax reporting of a single flip property vs business LLC

[Tracey Hamilton]

Hi All!  I am wrapping up tax prep on my extension for 2018.  I am thinking creative thoughts about how to handle the real estate flip project that we began in 2018 and completed in 2019.  Let me know how you all think it should be handled on the taxes (I will be preparing my own taxes, and getting a look-over from a current professional before I send them in next week).

Here's what we did for this business / flip project: 

2018 - Set up 2-member LLC (in Oregon, where we lived) in preparation for doing property flips. We anticipated doing about 5 flips through this company. Got an EIN, set up bank account, got business cards. Funded the business checking account with funds from the HELOC on our personal residence.

Aug 2018 - purchased a SFH in Oregon for cash, in husband's personal name only. (don't ask why, total brain fart to not make the offer in the LLC name). We went to work on it ourselves, nights and weekends. Purchased a lot of assets for the "business" as we figured this would be the first of at least a few. Many tools, utility trailers, etc. Added fun, I was a licensed real estate broker, and did my one and only 2018 transaction as the buyer's agent for this property - received a cute little commission. I will do a Schedule C for that part time real estate business, which will end up a small loss.

Late 2018 - had a semi-brain fart and switched title to add me, as wife, on title. Still didn't put it in the LLC. No, I don't know why I didn't.

March 2019 - sold the home.  Received 1099-S from title company (in husband's name only).  I acted as seller's agent for real estate brokerage, and again, it was my one and only real estate transaction for 2019.  Make about $40k "profit" - net gain.

July 2019 - moved out of state, to Idaho. 

Now -once I've finished the 2018 taxes, we're closing the Oregon LLC down entirely. We will start fresh with business stuff up here in Idaho.

So, in contrast to our plans, there was only one real estate flip under that LLC business, and in the state of Oregon.

Can I simply scrap my plan of having a "business" that did flips, and NOT prepare a return for the LLC for 2018 or 2019, and put all costs of the rehab, including tools, into the Basis of the home, and just report everything in 2019 on a Form 8949 and Schedule D for the IRS? Close down the LLC in Oregon with the secretary of state and shut down the checking account?

I love that idea, but it seems too easy. 

Did I mess up that option by running the supplies and expenses (and a couple of subcontractors) through the LLC checking account? Or is it all still considered basis? THe more I think about it, the more I think YES, I can do that.

THANKS for all your input!  I'm going to sleep on it, and then make my move tomorrow and finish up my taxes! 

Tracey in North Idaho