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fcgiii
New Member

Sale of land

We bought a piece of land in Chincoteague Virginia in 1973. We could not sell it until 2014 because the land did not perk and we would have lost money.  We installed a high tech septic system in 2015 and started trying to sell it. It eventually sold in 2020. 

 

Question: can we deduct costs incurred keeping the land cleared and mowed from 2015 to 2020?

 

Can we deduct travel from our home in Springfield Virginia to Chincoteague to meet with real estate agents, check on the property, meet with individuals we hired to keep it clear?

 

Thanks in advance,

3 Replies
ColeenD3
Expert Alumni

Sale of land

Prior to TCJA, you could have taken expenses as miscellaneous on Schedule A, subject to a 2% of AGI floor. The only option now is to capitalize them and add them to the cost of the lot or land. Please see this LINK for more information.

 

Listed below are closing costs that you can add to the basis of the property.

 

 

  • Title fees
  • real estate commissions
  • documentary stamps
  • credit report costs
  • costs of an abstract
  • transfer taxes
  • home inspection
  • flood certificate
  • attorney fees, etc.  

 

 

 

security1989
Returning Member

Sale of land

Wife and I sold a piece of land in orando fl in 2020. owned for number of years. made no profits on sale. do I need to claim on 1040. Sale price $25k.

Hal_Al
Level 15

Sale of land

Q. Wife and I sold a piece of land, owned for number of years. made no profits on sale. do I need to claim on 1040. 

A. Yes. The $25K is "gross income" and you will (almost certainly) get an IRS form 1099-S, for that amount, from the closing agent. The IRS will be looking for that on your tax return.  But, you will subtract your cost basis on form 8949 and report only the net capital gain (profit).  If you had no gain, you can (most likely) deduct any capital loss*. 

 

*A capital loss on personal use property (e.g.  2nd home or recreation property) is not deductible.  The loss on investment property is deductible.   Any gain is taxable, regardless of use (except primary residence).

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