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Get your taxes done using TurboTax
@rocky551 wrote:
Thanks. So you're saying that I can just do my taxes normally this year (I use TurboTax) and not worry about this until I sell my house? I imagine when I put the house up for sale I'll need to do a new survey because 800 sf at the curb no longer belong to me. Thanks.
Well, if you receive tax paperwork, you may have to report the sale so the IRS doesn't send you a letter.
If you got a 1099-S at the closing, that reports sale of property. You would need to report the sale of land, use the data purchased and date sold. For purchase price, use the same as the selling price so you have no gain or loss.
If you received a 1099-MISC, you can list that under "other/miscellaneous income" and then create a separate item of other/misc income in the same amount but negative to offset it (zero it out) so it's not taxable, you can list a reason like "sale due to eminent domain for no gain." Either way, you have zero taxable income so it won't change your tax. And if you didn't get any kind of tax paperwork from the county, you would just ignore it on your tax return.
Whether or not you need a survey would be up to the buyer, I suppose. (In both places I have bought homes, the survey is required by the buyer's mortgage lender so the buyer has to pay for it.)