How to report involuntary conversion of commercial property taken for conservation; original basis not known.

[anon30]

I am the last surviving former owner of a commercial property which was taken for conservation under the Pennsylvania Blight Act.  My brother was managing the property, but fell ill during COVID; the Borough pulled  the wrong deed and took the property without notifying me.  I only found out after the conservation and sale were complete.  All records of the original costs, etc. were destroyed during the conservation.  My questions: 

1)  Where do I report this involuntary sale of real property?  

2) How should I figure the gain or loss?  I received only pennies on the dollar due to the fees charged by the Borough and their Conservator.  There are court records of offers to buy the property, and also an independent retrospective professional appraisal.

3) Can legal fees be deducted from any gains? 

[RobertB4444 · Accepted solution]

You'll report it as the sale of an investment property.  In TurboTax scroll down in the wages and income section of your federal return until you get to 'Investment Income'.  Click 'start' next to 'Stocks, Cryptocurrency, Mutual Funds, Bonds, Other' (you're the other).  Enter the sale as a sale of an investment.  

You'll need to try and figure out what you all paid for the building in order to have a basis.  I know you said those records were destroyed but you will have to come up with a good faith estimate or something.  Whatever you do keep a record of how you arrived at the number in case there are any questions later.  

You will also be asked about the costs of the sale.  This is where you enter the fees that the borough and the conservator charged.  You can also enter legal fees or any other expenses here that were related to the sale.

@anon30