All Forum Posts by: Michelle Marshall

Thank you for all the responses! There's no doubt I'll need to get in touch and hire a CPA at this point.

I did charge her interest above what AFR was but not over $600 so I didn't issue a 1098. If I claimed the $40K+ as interest now, would I need to issue a 1098?  I was already planning to report the interest income without issuing the form. I had only loaned her the money for three months, so there's no LTCG benefit to be had.

Really appreciate it, and if anyone has any leads on a CPA in the San Diego area that may have a chance to squeeze me in, that would be great.

Cheers!

How do I characterize/report the proceeds from a "flip"  in that I never actually owned?

Last year I loaned my best friend money to get out from under her house. I loaned her money up front to move out and get settled in her new place. I also loaned her money to cover the costs of the repairs and upgrading the house, to include her mortgage.  To secure the loan I filed a second against the house and once the house sold, I was paid out from the escrow company.

I did not receive any tax forms from the escrow company, but didn't believe I would.

I did charge her interest but how do I report the amount that I was paid out from escrow on that is above what I loaned her? In H&R Block the only place that appears to apply for me would be "other income" and which will be taxed as ordinary income.  This isn't about avoiding taxes, I just want to make sure that I am capturing it in the right place.

I don't own a business. My expenses are strictly what I paid for materials and for services to have the work done. I didn't intend to flip, and most definitely will never touch a flip again. So I don't believe I need to consider this self employment and also pay self employment tax.  But would I want to consider this in order to use the 20% pass through benefit and then expense things like mileage and cell phone?  

Also, not sure if it matters, but the amount I made after expenses is greater than the gift allowance.

Thank you!