What form should a trust use to show the sale of a farm?

[Anonymous_]

What type of trust? 

Non-grantor trusts typically report income and expenses on Form 1041.

See https://www.irs.gov/instructions/i1041#en_US_2022_publink1000285938

No offense, but if you have to ask which form should be used for a trust, you should be consulting with a local tax professional.

[suem947622]

No offense taken, I should have been more specific.  This was land owned by a trust that was rented out to a farmer. I have previously used Sch E Supplemental Income., which flows it to the 1041.  So, should I use Sch E for long term capital gain, or do I need to use Form 4797 Part III? thank you

[Anonymous_]

Form 4797 to report the sale.

Are you using TurboTax Business? If so, the program should be able to walk you through the steps to input the sale.

[suem947622]

Yes, I use TurboTax Business.  I do not see anywhere it asks about sale of an asset such as land other than an inherited home, which this isn't.  It does direct me to Sch E for the rental income for that land. But Sch E also references Form 4797 for long term capital gains.  So I'm still not certain which is the correct form to use.

thank you

[Anonymous_]

Is this just raw land (i.e., no structures)?

If so, then you simply need to report the sale on Form 8949 and Schedule D.

[suem947622]

thank you

[suem947622]

and if there were buildings?

[Anonymous_]

Buildings (structures) are depreciable and there would be "recapture" of any deductions taken or should have been taken on prior returns. That would be entered on Form 4797.

[Critter-3]

The buildings should have been listed as assets and been depreciated.  In the asset section you simply sell them off and the sale will be reported on the correct forms automatically.

[suem947622]

So form 8949 only seems to reference 1099-B.  I have a 1099-S which only shows gross proceeds, and doesn't appear to be available in TurboTax.  What a can of worms I have here!

[Anonymous_]

The type of tax reporting form is not really relevant (particularly a 1099-S).

Did you sell raw land or was there a structure involved? 

If you sold raw land, then you would report the sale in the same manner as if you sold a stock, mutual fund, or bond (you will see that section in the program interview).