Posted by Diane (TX) on January 11, 2003 at 08:30:26:
Wade - You need an accountant. Get one.
Carrying costs aren’t currently deductible. Those costs need to be added to your cost basis, so you’ll get benefit for these expenses when you sell the property. If the labor is just for developing the lots, it should be added to the cost basis of the lots.
For your general business expenses that don’t relate to a particular property (such as advertising), they’re currently deductible. When you have expenses greater than income, you create a net operating loss (NOL). The carryforward period is 15 years (20 for 2003 NOLs, I believe).
I have a c-corp and buying a lot for development with 1 1/2 yr Carry (with expenses),(can labor be expensed towards developing?) before completion/sales (6 Condo,s). I just started to advertise for pre-foreclosures/distressed properties etc.- alot of expenses & payroll (flippers,need cashflow!) my year ends in may though . How would I write these different things off? Is there a limit for losses carried forward? I might not make a sale by year end. Thank you , Sorry I know it’s alot! Wade