How do I deduct investment expenses after the sale required by contract?

We sold an investment property (raw land) in 2022. Part of the sales contract was replacing a culvert, which could not be done until the following year, at an expense of $30k. How do I write this off? The sale happened in 2022, the expense happened in 2023.

posted

Since the sale was in 2022 then it needs to be reported in 2022. You can go back and amend that return to add $30K to your basis for the land to reduce your gain on the sale.

@toodeep1

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