Cost basis

[Arturo]

In 2019, I sold a lot in a residential community  that I was holding onto for investment purposes.  I need to know what expenses, besides  title expenses  that I can include in the cost basis. 

Over 6 years I owned this property, which by the way is a vacant lot between two houses,  I paid HOA annual dues, LA county  property taxes, and HOA  mandated maintenance fees to keep vegetation like trees and brush  from becoming a fire hazard. The tree removal had the additional benefit of allowing for a territorial view.  

Can any of these expenses be included in the cost basis?  Can the tree removal be counted as an improvement if not an expense?

Thanks in advance for your responses.

[ReginaM · Accepted solution]

I am sorry, you can not claim your ordinary expenses for keeping up this property as part of the adjusted cost basis for this property.  If the tree removal was necessary for overall safety of structure, then it is an expense and you can not consider it as part of your adjusted basis.  You however, can adjust the basis of your property by the closing costs that you incurred.

If the tree removal was part of a landscaping endeavor, then you could use these costs as part of your adjusted basis of your lot.  See IRS Publication 551 for more information.

To make the entry in TurboTax, follow these steps while in your Tax Home.

1. Select Wages & Income,
2. Scroll down to Investment Income,
3. Select Stocks, Mutual Funds, Bonds, Other.
4. Respond "yes" to Did you sell any investments? 
5. Answer No to Did you get a 1099-B or brokerage statement? 
6. You'll be shown a list of various investment sales and you'll select Land,
7. You'll be taken to the screen that says Enter Land Sale Information and you'll be able to enter your information.  

[convertibledreaming]

ReginaM,

HELP!  I can't see how to message you directly... 

I have a -$125,000 loss from a LLC K1, but  $72,000 cash income from freelance/property management work I've done.  No matter HOW I enter in the cash bank deposits, I'm still getting taxed the full amount.  How do I get my K1 to pass through and offset the gains I had in cash?  I want to be honest, but it kicks in a $10,200 tax bill if I report the deposits.  Why doesn't the extreme loss of my 3 member LLC still show a loss for my TOTAL taxable income?

BTW- The loss in from box 1 on the K1.  It's not in relation to rental properties. It's my husband and I doing a VERY SMALL car repair/dealership.  The cash that I'd like to report is from our number one customer who ended up having us repair his 3 properties and all vehicles. 

I've tried to use "bank statement" to add the amount and choose "freelance" work, but the K1 loss doens't counter balance that.  I removed that entry and tried to enter in a "business" in our own name/address in order to create a schedule C, but that didn't offset the K1 loss either.  

HELP Regina!!?  

[KrisD15]

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