Spec Home Builder

[Matt Douglass]

If a taxpayer builds a home as a side business, how is that entered into ProConnect?  

Taxpayer has a W-2 job unrelated to construction. A majority of their income comes from their regular job. They built this house on the side purely with the intent of selling it for profit. Purchased the land in 2023 and had expenses in 2023. Sold the completed house in 2024.

I know that the expenses are added to the basis when the house sells and I'm looking for tips on where in Proconnect to enter the sales proceeds and basis information.

Thank you all!

[BobKamman]

Schedule C.

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[Matt Douglass]

Thank you for the response Bob, I am a tax preparer, I should have phrased this question as "I have a client who..."

I understand that I enter on Schedule C, and I was planning on listing all expenses under cost of goods sold. the taxpayer has expenses from both 2023 and 2024, should all be listed under cost of goods sold or should the 2023 expenses be COGS and the 2024 listed in the various lines of the schedule C?

Thank you!

[sjrcpa]

Costs of construction are capitalized.

Cost of Goods Sold is deducted in 2024 when the home sold.