Purchased Land in Business Name - What form for associated Expenses in TurboTax Business

[GjOmoba]

Hi,

I purchased land in business name. The goal is to build a rental property on the land but building has not commenced.

What form in TurboTax Business do I show the associated expenses on. And should this land be added as an asset in Turbotax?

Expenses includes closing costs, taxes paid at closing, etc.

Thanks,

Gunju//

[PatriciaV]

The expenses you listed are included in the total purchase price (basis) of the land. Because land is not depreciated, you won't list this under Business Assets for your business tax return. Instead, its basis is shown on your Balance Sheet (if you include one). You will need to know the total you paid for the land if and when you sell it. 

[GjOmoba]

Thanks. I get the part about not listing it as an asset. And it may make sense to just consider all the expenses as part of the cost. But there are annual property taxes that should be expense-able.

[PatriciaV · Accepted solution]

Yes, property taxes are business expenses reported under that topic in TurboTax Business. 

Here is a list of costs that should be capitalized into the property basis:

 - commissions

 - appraisal fees

 - broker's fees

 - legal fees

 - advertising fees

 - home inspection reports

 - title insurance

 - transfer taxes or fees

 - geological surveys

These costs are not capitalized (some may be expensed):

 - mortgage payoffs

 - home equity loan payoffs

 - rent-back costs

 - payoff to creditors

 - property taxes

 - home owner association fees