| | Real Estate Flip
My LLC purchased a home in October of 2016 with the intent to flip and we have not sold the property yet. I live in CO and believe I am still required to file a 1065, as there are three partners. I have already requested the extension, but would like to get this done as soon as possible. I know the majority of expenses will be added to the basis of the property when we sell, but I believe I am still required to file the 1065 and issue K-1's to each partner. I was told by another CPA, who was too busy at the time to help much, that I can still write off the small expenditures for 2016 that were unrelated to the house, such as bank charges. We also purchased several tools (commercial paint sprayer, shop vac, miscellaneous tools) that were all under $1000, should I use those as an expense for 2016 as well or add those to the basis for 2017? If so, where do I put all of this information on the 1065? What items should I be expensing for 2016 if any? If it's just the bank charges, they were a whopping $15.
Also, do I need to include the purchase of the house as an asset in inventory and fill in Schedule L for 2016?
Thanks for your help!