capital expenses or deduction???

[Ana M.]

I am a real estate professional. (not passive activity).. I file jointly with my husband who is a doctor and has high income (500k/yr). I have 3 LLC's for mostly flipping properties. I have 2 rentals and 5 houses for flipping in each of my 3 LLC's .. In getting these properties in livable condition ready for sale, do these repair expenses (labor, materials, tax, and insurance) have to be capitalized or can be deducted in same year? I know that improvement has to be capitalized and repairs have to be deducted. most of the work done are repairs more then improvements.

What schedule do I need to use , schedule C or E for each LLC ? I am finding alot of conflicting information on these issues. Please help!

[Wayne Brooks]

If they are flips, not long term investments, the improvements/expenses are simply deducted from the net proceeds at the time of sale, as additional "cost of goods" , to determine profit.  As far as I know, they aren't deductible expenses "as you go along".

@Steven Hamilton II??