How to report the land portion of sale on rental property on form 4797

[DanTz]

Can you please so how the land portion of the rental property sale is to be reported on Part 1 of IRS form 4797.

Appreciate the help with this being further explained.

[JamesG1]

A residential rental has both the land component and the improvement (structure) component.

The cost basis of each is reported separately and the costs may need to be allocated at the time of purchase.

The improvement or structure can be depreciated over the appropriate useful life.  Land is not depreciated.

The sale of the business asset is reported within the rental property section of TurboTax Online.

Click on the asset at the screen Your property asset.

At the screen Did you stop using this asset in 2023, select Yes.

Asset sales price and asset sales expenses are reported at the screen Sales information.

Land is section 1231 property and is reported in Part I of the IRS form 4797.

The residential rental is section 1250 property and reported in Part III of the IRS form 4797.

Personal property used for business purposes is section 1245 property reported in Part III of the IRS form 4797.

Further explanation may be found at IRS Publication 544 here.