Q1. I have a 1099-S where I have the total gross proceeds from the sale listed. I also have added up all sales expenses (i.e. closing cost) from the HUD document. That should answer the 1st and 2nd box above. Is that correct?
For starters, disregard the 1099-S. That form only shows you the cash you were paid at the closing, and nothing more. Most likely, the amount does not include what was used from the sale proceeds to pay off the existing mortgage, property taxes, and other monetary obligations. You get your numbers from the HUD-1 statement you received at the closing.
Q2. How do I calculated the 3rd box (Land Sale Price)? I do have the initial purchase price and land value from a few years back when I purchased the rental. I also have the most recent property tax assessment for 2021. Do I use these to find land value? If so, which one?
Do the math to figure what percentage of your original purchase price was allocated to the land value when you initially purchased the property. Then use that same percentage to allocate a portion of your sales price to the land. Once you've allocated an appropriate amount to the land, the remaining amount has to be allocated among the structure and any other depreciable assets you may have listed in the Sale Of Assets/Depreciation section.
Q3. And finally, how do I calculate the 4th box (Land Sale Expense)?
Same percentage you used to figure Q2 above.
