The sale of bare land is considered an investment
and the sale is treated as the sale of a capital asset. (However, no capital
loss will be allowed on the sale of land that was or would have been used for
personal use only.)
Your capital gain
will be your net sales proceeds less cost basis. Without a 1099-S from the sale, you will need to just report the money that you received from this sale less selling costs.
Additionally, if
this property is not located in your state of residence, you may need to do a
nonresident state income tax return to recognize this sale in that other state
(income is sourced to where the property is located). You will get a tax
credit in your home state (if your home state has an individual income tax
filing requirement) for any state income tax paid to another state.
Click this link
for further information about reporting
the sale of a capital asset
To enter a capital
gain or loss on investment land in TurboTax (for TurboTax Online sign-in, click
Here), log into your tax return and
type "investment income (gains and losses)" in the search bar then
select "jump to investment income (gains and losses)". TurboTax will
guide you in entering this information (see step 6 below)
To enter your sale of land transaction in
TurboTax Online or Desktop, please follow these steps:
- Once you are in your tax
return, click on the “Federal Taxes” tab ("Personal" tab in
TurboTax Home & Business)
- Next click on “Wages &
Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose
what I work on” (jump to full list)
- Scroll down the screen until
to come to the section “Investment Income”
- Choose “Stocks, Mutual Funds,
Bonds, Other” and select “start’ (or “update” is you have already worked
on this section)
- The first screen will ask if
you sold any investments during the current tax year (This includes any
sale of real property held as an investment property so answer “yes” to
this question)
- Since you did not receive a
1099-B, answer “no” to the 1099-B question
- Choose type of investment you
sold - select Land
- Some basic information:
- Description –
Usually the address of the property sold
- Sales Proceeds – Net
proceeds from the sale
- Date Sold – Date you sold
the property
- Tell us how you acquired the
property - purchased
- Any business or rental use? -
if no, then select personal use only
- Some Basis information
- Date Acquired
- Original cost basis
