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Brian Michels
Brian Michels, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 160
Experience:  Partner at Michels & Hanley CPAs, LLP
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I started a business in 2016 where I purchased a house at an

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I started a business in 2016 where I purchased a house at an auction for $17k. I plan to renovate and sell. Can I write off acquisition expense on my 2016 taxes? (Investment property / non-performing)

Hello. My name is ***** ***** I'll be the Expert assisting you today. I look forward to helping you with your issue today. The purchaes of the house as well as any acquisition expenses would increase the basis of the asset (house). Any renovations incurred to improve the house and get it ready for resale are also included as increases in basis. When you sell the house in the future the taxable gain will be the proceeds from the sale of the house less any selling expenses less the basis in the house (basis in the house will include the original $17k purchase price, any acquisition expenses and costs to renovate). As such there won't be any tax deductions in 2016 since this is held for investment. The property is treated similar to inventory and income/loss is taken when you sell the home in the future tax year.

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Customer: replied 3 months ago.
thank you. what would be the IRS Business Code for this type of business? (Is it considered reseller of real estate?)

531390

Customer: replied 3 months ago.
Do I need to file a tax return for my 14 year old daughter. she recieved a 1099 for $2,180 and SSA-1099 for $4,068

No

Customer: replied 3 months ago.
last question. I read something about Self employment net earnings are more than $400, then my daughter would have to file.?

If the income was self employment income then she will have to file a tax return since its over $400.

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