Don't look here because the answer is within you.  Well, actually, within your client.  As others have pointed out, if it's a business, like selling Lamborghinis that may cost as much as a house, then it goes on Schedule C.  If it was an investment, because he knew the property would quickly increase in value, then it goes on Schedule D.  Putting it on Schedule C will likely increase what he owes, if there was a profit, because he will also have to pay self-employment tax.  Putting it on Schedule D, though, will mean his loss is limited to $3,000 instead of the full amount.  If he made money on this one, he might lose on the next -- the housing market has changed in some places, in the last couple weeks.  

In situations like this, you might ask him who did his return last year.  He may have been given an unfavorable answer by that preparer, and is hoping for a better one from you.  There is no law that requires you to prepare every return that walks in the door, but there are laws that require you to prepare a return that is true, correct and complete.