Hello, I would like to know the best way to categorize property expenses (purchase costs, holding costs, selling costs) for home flipping business. Should they belong to COGS or OPEX? or any other treatments that most commonly used by the home flipping industry? Thank you.
Property expense category
Answers
In my opinion holding costs are the most appropriate category for property expenses. The reason being that they are ongoing expenses that occur between the purchase and sale of the property.
1. Isn't holding cost contradictory to a flipper?
2. Selling cost should generally be a general expense unless extraordinary. (I hear of Teslas being used as an incentive).
The only reason for holding is if the property isn't sold in the current
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Accounting