Lets say I flipped one property in 2014 and I am in the middle of another flip.
In 2014 I bought a SFR X for 35K, put 30K (all in labor/material/holding costs + selling cost such as cost of closing attorney, escrow etc) and sod for 95K. in 2014 I also bought another SFR Y for 40K put 30K and did not sell in 2014. It is under contract to close on Feb 2015. All expenses were incurred in 2014
lets say I have created an LLC for the purpose of flipping. Now when it comes to schedule C. I shall put 95K in gross receipts of sale. Further I will put 65K in costs of goods sold to arrive at gross income of 30K.
now when it comes to account for my inventory at the year end I will do the following :
Purchases less cost of items withdrawn for personal use = 35K+30K+40K+30K = 135K = all the investments in 2014 – both properties combined + all labor/material/services/purchased etc
Inventory at end of year 2014 = 30K + 40K = 70K = SFR Y that I did not sell in 2014
Cost of goods sold.. = 65K = this should tie my previous COGS I already reported as my sale.
Do I need to break down the costs further on my tax return? I will send around 15 1099-MISC to my sub-contractors, have hundreds of HD receipts etc …it is hard to imagine the whole reporting takes 2 pages on my tax return schedule C? am I missing something ?
all the detailed calculations are done in excel.
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