Chad <abcz00_2000[at]yahoo.com> wrote:

- quote -

You are not self employed because nobody is paying you for
your work. You are buying an investment property, investing
time and money in improvements to its value and selling at a
profit. This is the same as buying 100 shares of GE,
holding them a few years and selling the, just a lot more
work. Report as capital gains on schedule D as a short term
gain.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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Chad wrote:

- quote -

Schedule D (only).

cheer$,
Harlan Lunsford, EA n LA

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During 2003 I purchased a house (not my personal residence)
to fix up and resell. I made about half of the improvements
myself and I contracted out the rest of the work. I sold
the property during 2003 at a profit and also purchased
another property in Dec. I plan to work on it throughout
this year and then sell it in 2005. I hold a full time job
in an industry totally unrelated to real estate. After I
sell that property in 2005 that will be the last of the
purchases. My question is, do I need to report this
activity on a Schedule C or report it as an investment on
Form 4797/Schedule D?

In addition to providing your opinions, do you have any
specific guidance guidance from the IRS on this? I know it
is a common situation, so I just want to make sure I handle
this correctly!

Thanks!

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