Tax question and one miscellaneous question?

[Patrick Philip]

Main point of the thread is about taxes for FY 2017. I bought my first flip house in September 2017. I am still working on it. Rehab should be completed by the end of this month.

I know that once I sell it, I must report it as short-term capital gains in FY 2018 taxes. Do I count the purchase as a business expense for 2017? That might create something weird on the taxes.

And what about all the materials, tools, and labor that I paid for in 2017? Do I file those as expenses in 2017 taxes, or file them in 2018 because that's when I sold the house?

Miscellaneous question (didn't want to start it's own thread). What material should the entry door and other main exterior doors be? Steel or fiberglass?

[J Scott]

Originally posted by @Patrick Philip:

I know that once I sell it, I must report it as short-term capital gains in FY 2018 taxes. 

No, it's not short-term capital gains.  It's ordinary income taxed at your marginal rate.

No, the purchase costs are considered Cost of Goods Sold (COGS) and they are only deductible in the year that you sell the inventory (house).

Just like the purchase costs, these are all COGS and deductible in the year in which you sell the house.

That's up to you.  What kind of doors does your competition use?