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Posted by Seth on April 16, 2007, 4:45 pm
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>>> I need help on schedule D-here's the quick details. I
>>> bought a house at auction and paid for it through my home
>>> line of credit for 76,000. There was a 3,000 dollar fee I
>>> paid to the auctioneer. I sold it 4 months later for
>>> 110,000 and had expenses of 8,000 to fix it up. Questions:
>>> Can I deduct the 3,000 dollars I paid to the auctioneer and
>>> if so do I add that to the cost basis?
>>>
>>> Can I deduct mileage I used to get to the house every day to
>>> fix it up?
>>>
>>> Do I deduct my home line of credit interest as an expense on
>>> schedule D, or do I deduct it somewhere else?
>> Why do you think schedule D applies rather than schedule C?
>> At first glance, this appears to be a business activity
>> rather than a passive investment.
> I think if this person just does it once- it's a capital gain
> & goes on sch D
>
> If buying, fixing up houses becomes his/her "day job"-
> it's a business & goes on sch c & all the costs are inventory
He went to the house "every day" to fix it up. That seems
like a day job to me.
Seth
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