Capital Gains for DIY Flipper

[Brian May]

I am looking to do my first flip and trying to get a sense for how best to realize my expenses for capital gains as a DIY flipper. As a DIY flipper my labor/install expenses are significantly less than a flipper that would contract out certain items. As an example, I have my flooring material costs at $2.50/sf, but I installed myself over say 10 hours. A person that hires the install out might be charged $2.00/sf for install.

How should I go about capturing these expenses when it comes to calculating the expenses for the overall profit and taxes required for capital gains? Which is the best option: 1) only include material expenses since I did the work myself, 2) use my tracked labor hours times a set hourly rate or 3) use a general install/labor rates as if the work was hired out?