Investors & landlords

In reference to "How do I claim a tax loss on land lost through tax forfeiture?".  In all likelihood you did not receive a 1099-S for this but if you did the sales price, if any, would be shown in Box 2 of Form 1099-S.  However, enter the "sale" as Other property as follows:

1. In Wages & Income, click on Investments and Savings (1099-B, etc.)
2. Click on +Add Investments, then Continue
3. Click on "Enter a different way"
4. Click on the box that says "Other"
5. Enter "Land"
6. In the following screen click on the down arrow for what type of investment and scroll down to Land (other investment purpose)
7. Continue to answer the questions until you get to proceeds.  There you have a decision to make.
8. If you have a 1099-S, then there is no decision, enter the amount from Box 2.  If no 1099-S then you must make a decision that has 2 trains of thought.  1 is that you enter zero for the proceeds and continue from there.  The other is if the amount of property tax still owed on the land and for which the property was taken can be considered to be the proceeds.  My own opinion is that the property tax owed would be considered proceeds in exchange for the property but I cannot site-specific guidance on this and I have explored multiple sources but none that deal specifically with your situation.
9. Whichever method you choose, either entering zero of the tax owed, proceed to Total amount paid and enter the total cost basis for the land.  That would include original purchase price, any improvements, and other upkeep if you did not deduct those costs elsewhere on previous returns.  If your business is not as a real estate professional or land developer, the yearly property taxes you paid would have been deductible on your personal return and not additional cost basis.

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