Sale of inherited farm

[cdheiser]

My wife and her three siblings inherited their parents farm when her mother passed in 2010 (so I will on apply 25% of the totals to our tax return).  The land has been rented from 2011 thru the end of 2019.  In February of 2020, the farm was sold at a loss as compared to the appraised value from 2010.  No depreciation was ever taken on the land over those nine years.  Do I categorize the sale simply as a sale of land since there was no income (or associated expenses) derived from the property in 2020 or should it be categorized as a business property sale at a loss.   Please advise which method is correct and if it should be a business property sale at a loss, how is that done in TurboTax Premier

[M-MTax]

It's a sale of land so there is no recapture of depreciation.....report income and expenses on SCH E and the sale as a sale of investment property.

[PattiF]

Yes, you would categorize this as a sale of land and personal income, not business income.

To enter the information in the TurboTax Desktop: 

• Click on Personal Income
• Then Investment Income, find  and click on Stocks, Mutual Funds, Bonds, Other
• Click Add More Sales
• Did you get a 1099-B.....? Click No
• Tell us about this sell I'll enter one sale at a time
• Enter information about the sale with Land as the Description and the Sale Category as Long term Not Reported