Yes, you are correct that you add the cost to the original purchase price to find the cost basis.
And some expenses that are listed on the settlement statement can be added to the basis. These include:
- Title fees
- real estate commissions
- documentary stamps
- credit report costs
- costs of an abstract
- transfer taxes
- home inspection
- flood certificate
- attorney fees, etc.
The sale of land that was used for personal reasons is entered in the investment section even though it was not an investment property. You cannot take a loss on personal-use property. Enter this as the sale of a second home since you cannot take a capital loss on personal-use property.
Here are instructions to enter the sale:
- Open or continue your return
- In the search box, search for sold second home and select the Jump to link
- Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
- If you land on the Your investment sales summary screen, select Add More Sales
- On the OK, let's start with one investment type screen, select Other, then Continue
- On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
- On the next screen, select Second Home (choose this also for inherited homes) or Land and answer the questions to finish entering your sale
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