How to expense a flip when purchased in 2019 but sold in 2020?

[Jeff Nichols]

I purchased a home to flip in 2019 but sold it in early 2020. I did most of the work and purchased most of the materials and supplies in 2019. How would I expense the profit in 2020 when the receipts are from 2019?

[Natalie Kolodij]

Literally just do it. 

Flips are inventory. 

Inventory recognizes expenses as "cost of goods sold" when you sell that good. 

So on your 2020 taxes you'll have a schedule C reporting the sale of your Flip, and then the correlated expenses.