Flipping Properties with another Person-

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  • Mtax
    Junior Member
    • Feb 2025
    • 8

    #1

    Flipping Properties with another Person-

    Hello Community!

    My new client purchases properties with another friend, renovates them and sells them. They each share 50% of the expenses and proceeds.
    I recommended that they should do a Partnership Return but they are telling me otherwise.

    Since this can be categorized as a Flipping House business- a schedule C can be done.

    1-Is it possible to just do a Schedule C for each of their share?
    2- Are we able to split the cost basis of each property and include in each of their Schedule C?

    3- Or Just categorize this has a short term capital gains? ( but of course this will be less tax beneficial).

    Your input is greatly appreciated!!



  • spanel
    Senior Member
    • Oct 2008
    • 845

    #2
    A partnership really needs to be formed. One big problem is when selling a house a 1099s will be issued. And its going to show only one of them with the entire amount.

    Chris

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    • Anarchrist
      Senior Member
      • Oct 2006
      • 353

      #3
      Originally posted by spanel
      a 1099s will be issued. And its going to show only one of them with the entire amount.
      I've seen lots of house sales with multiple 1099s split between the joint owners.

      "Taxation is the price we pay for failing to build a civilized society." ~ Mark Skousen

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