When it comes to reporting this on taxes:
Questions:
1. What information will you need ready to provide when reporting Capital Gains on house and farmland, just purchase and sale price?
You need 4 pieces of info :
Date bought, date sold, Basis (which equals the total of the purchase price +cost to buy + cost to sell + improvements if any) and Selling price reported on the 1099-S form you get at closing. The closing company should report the one sale on 2 1099-S forms ... one for each owner reporting only their share of the sale.
2. Since they both have 50% ownership in farmland and house, If asked what the purchase price was, would my husband only put what his 50% purchase amount of it was? Or do you have to report the full amount paid by both brothers together but then it will ask your percentage of ownership later? Same would go for reporting sale price too?
EXAMPLE: Purchase price $100,000 Total. Does he report $100,000 OR just the 50,000 (50%)he paid himself?
Each person only reports their portion of the sale on their return. They own 100% of their portion.
3. Can you please explain exactly how you go about reporting all of this in turbotax in the Self-Employed Version? I don't want to miss any necessary forms I am required to fill in.
Thank you for your time.
Unless this was a working farm or it was being rented the sale of a property will be reported on the Sch D via the form 8949 in the investments area of the income tab.
