Deducting Expenses on Unfinished Flip

[Shirley Roberson]

In 2020, my LLC entered into a contract with another investor to rehab a property that the investor owns. Basically I provide the funding and manage the project and the investor and I split the gross proceeds (the investor is handling the selling costs, taxes, etc.). The project was started in Sept but the rehab was not finished at the end of 2020. How should the expenses be handled? Can I wait and deduct the expenses from 2020 and 2021 in tax year 2021?