Sell of raw land

[rjs]

1. Yes, you will be able to report the capital loss on your 2024 tax return. In fact, you must report it because you got a 1099-S.

You don't report anything on your tax return when you purchase an investment, so you didn't omit anything from your 2020 tax return that should have been there.

2. You will be able to file your 2024 tax return electronically. You do not include any proof of the cost with your tax return. You just enter the amount that you paid for the land. If the IRS wants proof of the cost, they will send you a letter asking for it.

I think your bigger problem is the "or" in the first sentence of your post. You have to establish whether you bought the land strictly as an investment or for personal use, such as with the intent to build a house that you would live in. If it was for personal use you cannot claim the loss. You still have to report the sale on your tax return, since you got a 1099-S, but the loss will be adjusted to zero. If you report it as an investment loss, and you get audited, you might need some evidence that the purchase was intended as an investment and not for personal use.

[rjs]

It does sound like an investment. I would suggest that you just go ahead and report it as an investment sale. (This is just my opinion, not legal advice or tax advice.) You're not likely to be audited. If you are audited, maybe the fact that you never made any personal use of the land would be enough to support treating it as an investment. You could also print a copy of your last post above and keep it with your records of the sale.