Accepted offer Dec 2020, close Jan 2021, claim income for 2020?

Question

Just finished my first official flip and I accepted an offer on the house in December 2020. We won’t officially close until January of 2021. Is there any way I can claim the income on my 2020 taxes?

Chris Iley · Answer

@Eamonn McElroy

Thanks for the info. I figured that would be the case. so many loopholes out there...sometimes you don’t know till you ask.

Eamonn McElroy · Answer

At a bird's eye view --

Under cash method: No.

Under accrual method: No. Risks and rewards of ownership have not transferred before 12/31.

This is a good conversation for your CPA after you gain scale. Particularly long-term contracts if you get involved in those.

Accepted offer Dec 2020, close Jan 2021, claim income for 2020?

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