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August 30, 2024
Question

House built for Sale

  • August 30, 2024
  • 1 reply
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I have an LLC that is in the business of renting houses.  In 2022, the LLC bought 2 vacant lots.  In 2023, the LLC was in the process of building a house for sale.  The house actually sold in 2024.  How & where do I record the 2023 costs?  I am working on the 2023 partnership return.

    1 reply

    August 30, 2024

    a question with no definitive answer. it could be capital gain or ordinary income. you'll have to judge for yourself or consult a tax pro (at times court findings differ from location to location)

    https://www.thetaxadviser.com/issues/2012/dec/clinic-story-06.html#:~:text=In%20determining%20whether%20the%20income%20should%20be%20classified,the%20taxpayer%20habitually%20devoted%20to%20sales%20of%20property.