You will report the sale of the land on Schedule D and Form 8949 on your tax return in 2020. Your cost basis is the price your mother paid for the land. Your gain will be the sales price- sales expenses- cost basis.
Capital Gain Tax Rates
The tax rate on most net capital gain is no higher than 15% for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $78,750.
A capital gain rate of 15% applies if your taxable income is $78,750 or more but less than $434,550 for single; $488,850 for married filing jointly or qualifying widow(er); $461,700 for head of household, or $244,425 for married filing separately.
However, a net capital gain tax rate of 20% applies to the extent that your taxable income exceeds the thresholds set for the 15% capital gain rate. (IRS Capital Tax Rates)
Instructions on how to enter the sale in TurboTax next year:
- Login to your TurboTax Account
- Click "Work on other tax breaks"
- Click "Federal" from the left side of your screen
- Scroll down to "Investment Income" and select "Stocks, Mutual Funds, Bonds, Other".
- Respond "yes" to "Did you sell any investments?"
- Continue, until you'll be asked "Did you get a 1099-B or brokerage statement?" and answer "no."
- Select "Land" when shown a list of various investment sales
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