TAX TIME ? Regarding Gross Sales

General Real Estate Investing
1

Overview: I flip property primarily via a simultaneous closings.
In the last couple years, my CPA has had me determine my net profit after each double closing and use that total as my LLC gross profit.
I have an LLC taxed as an S-corp and we file a Schedule-E which reports the LLC’s net profits.

My Question: Is my method of showing my net profit correct?
Would I increase my already high chance for an audit by not recording the total Gross sales and Cost of Goods Sold.
ie: through a double closing I paid $80k and sold for $100k and my NET profit from the deal was $20k [no closing or settlements costs - that would be nice]…
Now I currently show the $20k as my net profit. But would showing the $100k under gross sales and $80k under the cost of goods sold.

I’m confused…

2

net income and tax liability are the same. no issues.

probably, he is choosing to not use COGS since you never actually own the inventory. no worries here.

However, flip income is ordinary income (not capital) and should be flowing to your 1040 as ordinary income. THIS is the issue you need to clarify with your CPA.