Since you did not sell your main home, even though you DID receive a 1099-S, you will need to report this under investment sales. To enter this take the following steps
- Federal
- Income
- Show More next to Investment Income
- Start next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
- Select Other
- Continue through and select Land personal use for the type of investment
- Answer how you obtained the land, the description can be Easement sale reported on 1099-S
- You will need to enter the selling price, dates and the cost basis of the items
The cost basis of the land would need to be determined by looking at your property tax records to find out which portion of your total purchase price of your home would be allocated to total land and then you would use the entire sq. ft. of your lot to allocate the percent of your lot that you sold as an easement.
Ex. You paid $200,000 for your home.
You look at your property tax bill and see that your improvements assessed value is $50,000 for your improvements and $10,000 for land. So your total assessed value is $60,000.
Your total lot is 12,000 sq. ft. and the easement sold was 1,000 sq. ft.
Your land is 16.7% of your total home value (10,000/60,000).
Therefore your land cost basis would be $33,333.33.
You sold 8.3 % of your land. (1,000 sq. ft./12,000 sq. ft)
The cost basis of your land that you sold for the easement is $2,777.78 (8.3 x 33,333.33)
When or if you do sell your home, you will then also reduce the cost basis of your home by the amount you received for the easement.
Sale of Easement
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