Mortgage Interest on Flip House

[Hoosier]

In the research process on this but decided to post the question anyway... Client purchased flip house and took out a mortgage loan to improve the property. It looks like the mortgage interest is considered investment interest and would be reported on form 4952 for the year incurred. The client cannot itemize and has no investment income. The question is: Can the taxpayer elect to add the mortgage interest to basis as opposed to reporting on form 4952?

[New York Enrolled Agent]

See if Reg. 1.266-1(b) is applicable.

[terryats]

If you are in the business of flipping houses, you will report all the income and sales and expenses on a Schedule C from self-employment.