Flip turns into long term rental
Hello Tax team, Here is the scenario and I want to understand how the cost elements needs to be treated from taxing aspect?
I purchased a property to flip in 2022. The property was ready for a sale in 2023 but could not sell it. Then now I hold the property as a long term rental since Mid 2023.
I spent quite a bit of money for upgrades before renting the house and also spent some money (mostly repairs) after converted into long term rental.
So in my 2023 taxes, should I be able to show any of the cost elements spent before the upgrade as expenses and get a benefit out of it?
or those expenses will be added to my purchase price and becomes the total asset value? Is this asset value come into picture when I sell the property, expecting in 2026 or beyond?
Please advise.