Can I use a different cost basis for land purchased in 2001 and sold in 2018 as an investment whci was jointly owned with husband who died in 2005. appraised in 2005.

[sharonharms]

Can I recognize a higher loss is I use 2005 appraised value as 50% of the cost basis?

[DDollar · Accepted solution]

You not only can, but you should use the stepped up basis for half of the property based upon the 2005 appraisal.

[sharonharms]

how do you enter this in turbo?

[DDollar]

Are you asking how to report the sale of the investment property?

[sharonharms]

how do you change the purchase price and does putchase date change? Or do you add a worksheet somehow?

[sharonharms]

Can I recognize any more than a 3000 loss/ carryover?

[DDollar]

You can use an unlimited amount of the loss to offset capital gains.  You can only use $3,000 per year to offset ordinary income. I'm not sure what you're asking about changing the purchase price.  Please post a new Answer Xchange question and provide more information on what you're trying to do.

[sharonharms]

So I would like to optimize my capital loss on the land since it sounds like I would be able to apply this next year on the capital gains I get fir my house. I do not know how to update the cost basis with the fair market value for 50% of the original purchase price. ( i assume the land is considered an investment rather than personal use property which is why we bought it.) Turbotax only asks for the purchase and sale price....not any updated asset value....

[DDollar]

Just reduce your purchase price.

[sharonharms]

Do you mean increase the purchase price?

If I did this I guess I would take 2001 purchase price of 325,000 and average it with FMV 0f $700,000  in 2005 to create an adjusted cost basis and use that as the purchase price ($512,500). Since the sales price was $302,000 minus $22,000 sales cost this should drive a capital loss of about $233,000.
Sounds like this will be helpful to bring diwn the capital gains tax on my primary home in the next year or two.
Let me know if this is correct approach. I will keep all the doc for back up but I have not seen any worksheets to document something like this in Turbo.

[DDollar]

That's the way I would do it.  There is no worksheet for land as an investment.  Just enter cost basis and proceeds.