Raw Land Sale 1099-S

[ksg2000]

I own 50% share in raw undeveloped land in AZ that was inherited and each of us have agreed to sell the property. Is it correct that the title company will issue a 1099-S for the full amount of the profit to each owner? If so, how do each of the owners report only their share of the proceeds when filing 2024 tax return. So, hypothetically if the land sells $1000 and say $300 was withheld and a 1099-S is filed in each owners name for the amount of $700, how do the owner's report they only received $350 of the $700 gains?

[tagteam]

You could, conceivably, just report your share (e.g. $350).

However, the better approach might be to report the entire proceeds on your return (and basis) and then indicate that you received 50% as nominee for the other party.

[ksg2000]

Okay. Not heard of nominee in tax filing. Why file for the full amount then file a 50% as a nominee, what is the benefit? How do you file this and can it be done through TurboTax?

[tagteam]

If you receive a 1099-S for the full amount and report half of the proceeds, the IRS may question that.

Nominee reporting allows you to report the full proceeds as shown on your 1099-S and attribute a share to another party.

You are most likely better off just reporting your 50% and leave it at that. Nominee reporting for a 1099-S in TurboTax is not straightforward and would require the use of Forms Mode and possibly an override.

If you're ever questioned, you can simply respond stating that your share of the proceeds shown on the 1099-S was 50%. Make sure to retain the documents from the transaction just in case.