Get your taxes done using TurboTax

Yes, although land is not depreciable, improvements you make to the land to make it usable can be added to the basis of the Fair market Value of the land when you purchased it in 1998. To report, you need to report it as an investment sale.  

1. Income and expenses once you open your Turbo Tax program.
2. Investment Income.
3. Did you sell any of these investments in 2021? Say yes
4. Stocks, Cryptocurrency, Mutual Funds, Other (1099-B)
5. Choose the Other option on what type of investment was sold
6. Type in the name of the company when TurboTax requests a name
7. Choose Other for the type of investment sold and answer the questions
8. Next screen says Now we’ll walk you through entering your sale details. Here in the first drop-down, select land(other investment purposes)
9. Next drop down you will indicate you inherited the land.
10. Enter the Proceeds you received equal to the gain you want to report
11. Next you will enter the FMV of the land when you inherited it. Here you will add to that total all the improvements as cost basis., except for the Fire Lane.
12. I have one question about the fire lane.  Was this an easement that was granted  by the local authorities or did you pay to have this lane put in ? Please respond to this question so I can give you the correct tax advice.
13. The reason I asked if the local officials granted this easement and you paid no out of pocket for this, you will need to substract the value of this easement from the basis in step 11 above. This is outlined in IRS Rev Rule 68-291 found in this document. It states Revenue Ruling 68-291, 1968-1 C.B. 351, clarifying Revenue Ruling 59-121, 1959-1 C.B. 212, provides generally that the consideration received for the granting of a perpetual easement constitutes the proceeds from the sale of an interest in real property and should be applied as a reduction of the cost or other basis of the portion of the land subject to the easement."