Is this a deprecable asset?

[AZ-Tax]

TP buys a house for flipping back in 2008 but still owns it. Never rented it nor lived in it. Never had a client who just purchased a house and never rented it or nor lived in it.

[FEDUKE404]

Vote "no"

TP buys a house for flipping back in 2008 but still owns it. Never rented it nor lived in it. Never had a client who just purchased a house and never rented it or nor lived in it.

Weird situation. Your client must have lots of $$ to fling around.

Hopefully the house (at least in theory) qualifies as a "second residence" ?

I don't see any way depreciation could be a factor here.

FE

[AZ-Tax]

What about owning 3 house to be flipped?

Weird situation. Your client must have lots of $$ to fling around.

Hopefully the house (at least in theory) qualifies as a "second residence" ?

I don't see any way depreciation could be a factor here.

FE

Assume a TP is a house flipper and purchased 3 residential houses. Never rented nor lived in any. Would any of the houses be depreciable?

[FEDUKE404]

Reason to depreciate is ? ?

Assume a TP is a house flipper and purchased 3 residential houses. Never rented nor lived in any. Would any of the houses be depreciable?

Just curious, whether one or three houses, how would you plan to legitimize depreciation on any non-business asset ? ?

FE

[AZ-Tax]

Maybe that is the question, is it considered a business?

Just curious, whether one or three houses, how would you plan to legitimize depreciation on any non-business asset ? ?

FE

Maybe that is the question that needs to be answered, is it considered a business for the TP? In AZ if you sell a min number of cars and/or trucks, you are required to obtain a dealer license and I am sure similar laws exist in other states.

[Rapid Robert]

Assume a TP is a house flipper and purchased 3 residential houses. Never rented nor lived in any. Would any of the houses be depreciable?

Non-depreciable inventory.

[AZ-Tax]

Installment Sale income gain under Sect 1231 gain.

Non-depreciable inventory.

Upon viewing 2014 tax return prepared by previous preparer, has the "installment sale income" as Sect 1231 Gain.

[taxmom34]

original post you said he still owns this house. now he sold it on an installment sale in 2014? is this same house?

[FEDUKE404]

Phantom sale

original post you said he still owns this house. now he sold it on an installment sale in 2014? is this same house?

Darn good question!!

[AZ-Tax]

He does again via repo

original post you said he still owns this house. now he sold it on an installment sale in 2014? is this same house?

He does again via repo. Upon looking at the previous tax returns, the preparer never took depreciation which maybe is correct.

[Burke]

See Rapid Roberts response. This is NOT depreciable property. It is unsold inventory. When he sells it, he gets to deduct his purchase cost plus improvements.

[taxmom34]

agree with Burke. and if he has 3 properties he may be subject to SE when he sells.