The purchase of a property you are flipping is considered the purchase of inventory and is not deductible. You may have some other expenses you incurred in 2017 for the project that are deductible, such as insurance, interest, property tax. I would recommend you engage with a tax professional, especially if this is your first rodeo.
@Andrew Leighton , unfortunately, flipping properties are considered inventory for a flipper. The money you spent on a house cannot be deducted until you sell the house. If you sell the house this year, you will get the deduction. Usually there would be ways to reduce tax liability if you had reached out before the 2017 Year Eend and throughout the year. Something to keep in mind for 2018 since you will have more gains from flip.
Thanks for the info guys. I just wish there was a way I could reduce that bill. I will be talking with a tax professional hopefully by this weekend.
Purchasing a home used for flipping is considered inventory. There are other costs that are added to the cost of inventory. However, there are certain holding costs that should be able to be deducted in the current year that can potentially reduce your tax liability.
However, the only way to know is to reach out a tax accountant/advisor that understands the business.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.