How to use 2021 Turbotax Deluxe to report Sale of Vacant Land in 2021

[Datharpman]

I am using 2021 Turbotax Deluxe and sold vacant lot in 2021.   I assume that this version has the correct algorithms to calculate a land sale correctly, even though Turbotax says I need to upgrade.   I would appreciate any help to confirm that the way I input my information (shown below) into this Deluxe version is providing a correct tax outcome. 

1) went to "investment income"

2) went to "stocks, mutual funds, bonds, other"

3) answered no to having a 1099--B

4) checked "I'll enter one sale at a time"

5) For Description, entered "Sale of Land"

6) For Date Sold, entered closing date of me selling land

7) For Date Acquired, entered closing date when I bought the property

😎 For Sale Proceeds, I entered the "Gross Proceeds" from box 2 of my 1099-S

9) For Cost or other Basis, I entered the price I paid for the land when I bought it

10) For Holding Period, I entered long term since I had the property for ~17 years

ADDITIONAL QUESTION on point 8 above -- the value in box 2 of my 1099-S is the actual price I sold the lot for.  Can I reduce this amount by the costs (i.e. realtor commissions and lawyer fees) associated with selling the land

[DoninGA]

Yes, you can subtract the any selling expenses you incurred when the property was sold, realtor commissions, etc.

If you are using the TurboTax Deluxe desktop CD/Download edition there is no need to upgrade to the Premier edition since all the desktop editions include the same forms, schedules and worksheets.  It is recommended to upgrade to Premier since it includes more assistance for an investment sale, but it is NOT required.

[tagteam]

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@Datharpman wrote:

Can I reduce this amount by the costs (i.e. realtor commissions and lawyer fees) associated with selling...

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Yes, reduce the sales price by the total of your selling expenses.

[Datharpman]

Thank You DoninGA

[Datharpman]

Thank you tagteam

[pizzinv]

I am in the same situation for the most part but my lot I sold was included with the purchase of my house.  I sold my house in 2018 and kept the lot (two separate parcels numbers).  When I put in my purchase value, do I put in what I paid for the house with lot (since they were purchased together and came together) in 1991?

Please advise.  Any help is greatly appreciated.

Thank you.

Val

[KrisD15]

No

Your "basis" or cost for the lot you just sold would need to be the value of the land only. 

There are exceptions to capital gains on property adjacent to your home, but the sales need to be within 2 years, so would not apply in your situation. In other words, if there is a gain on the lot sale, you'll need to claim that gain.

Because you need to value that parcel alone, I suggest you look at your tax assessment for the year of purchase. Since the parcel has its own tax ID, your tax bill should have a separate value for that lot. 

[pizzinv]

Thank you for this additional information but the Stark County Auditor page records does not go back to 1991 when I purchased only to 2010.  I do not have the information from 1991 any longer.  Can I use the value of land from 2010 when putting my information in Turbo Tax?

Thank you.

[AmyC]

No, you need to get the value for 1991 as accurately as possible. The records should date much farther back at the courthouse. Another option, a real estate agent or neighbor's may have some additional information. Call your local assessor's office. There should also be purchase records logged and kept somewhere in town, maybe the courthouse. Somebody in your city knows exactly what you paid. The IRS says if you can't provide a basis, it should be zero.

[R2022]

When entering a land sale do you just state LAND?  Is an address required?  Asking ad you Vacant land does not have a street address. 

[PatriciaV]

@R2022

Yes, report your land sale under Investment Sales. When asked, state that you sold Land. If it has no street address, use "General Delivery" as the street address, and the closest town or city, plus state.