Sale of flip home
Taxpayer purchased a home in Feb and sold in July of the same year. From Feb to May taxpayer spent 15K fixing up the home. These expenses would normally be expensed and not capitalized as improvement or a betterment. My question is - since this is not a business can the fixing up expenses be added to basis. Also, at closing of the sale of the property, taxpayer was required to pay property tax in addition to normal closing costs. Can the property tax be used to reduce the sales price and if not I assume that he could deduct on schedule A since this was not a second home. One more thing, if sold at a loss can the loss be taken or would this be considered personal property and only a gain would be reported. I was thinking this could be considered investment property and the sale reported on schedule D and the loss would be allowed.