Good Afternoon,
I recently sold a home that I purchased to flip. As this was a one off, I was hoping that I could accurately account for it in QBSE rather than upgrading to QBO. I categorized the original purchase price as "Materials and Supplies" (as there was no where fitting that would fall in a deductible category), the material used to upgrade the home as "Materials and Supplies", and the sale of the home as "Income". My first question is would categorizing the purchase as such cause any taxing issues or not since the purchase price would ultimately fall under a deductible category and would achieve the same goal on the ledger? My second question is since I purchased the home and some of the materials in 2020, but did not take any deductions for that tax year, what is the correct way to have those expense lines show in 2021 in QBSE?
Thank you,
Alex C