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…