Yes, you may report this as an Investment Sale.
Because you have previously reported the interest income but not the principal payments, you will need to adjust the sales proceeds for the missing income. Also, since you have not recognized any portion of the gain/loss while receiving payments on the land contract, you will report the entire gain/loss this year.
The sale of an investment home is reported under the Investment
Income area of Wages & Income.
- Choose Federal Taxes >>
Wages and Income, then I’ll Choose What I Work On.
- Investment Income >>
Stocks, Mutual Funds >> Start/Update.
- Type of Investment: Everything Else
- Enter a description, Net
Proceeds PLUS principal payments received in prior years.
- Acquired: how this property
was acquired
- Cost Basis: original purchase
price plus closing costs
- Date of Acquisition: date you
purchased the property
TurboTax will
determine if you had a gain or a loss on this investment and determine if it
was short- or long-term. If you have other capital gains, a loss will offset
some or all of the gains. Otherwise, up to $3,000 of the capital loss will go
to line 13 of Form 1040 and offset other income. The remaining loss over $3,000
will be carried forward each year until used up (applied to capital gains
and/or ordinary income). If the sale resulted in a gain, it will be taxed as
capital gains.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
