Deductions & credits

You must amend the 2021 return to report the loss even if it is not deductible before the IRS sends you a CP2000 looking for taxes on the amount of the sale reported on the 1099-S.   If you don't report the basis to offset the sale the IRS assumes the basis was zero and the entire sale is taxable.   And if this land was held for investment purposes then the loss is deductible. 

View solution in original post