topic I sold land & a portion of the proceeds were placed in escrow, to be released after one year. How do I account for the sale & escrow amount on the tax return? in Deductions & credits

I sold land & a portion of the proceeds were placed in escrow, to be released after one year. How do I account for the sale & escrow amount on the tax return?

dbarn72 — Sat, 20 Mar 2021 22:37:08 GMT

The amount was placed in escrow to cover a potential law suit (which did not occur). I received the funds from escrow in early 2021. The amount in escrow is material - it is 10% of the selling price.

Re: I sold land & a portion of the proceeds were placed in escrow, to be released after one year....

JotikaT2 — Sat, 20 Mar 2021 21:53:53 GMT

You will enter this information into TurboTax in the federal interview section as follows:

Select Income & Expenses
Scroll down through all income until you see Investment income
Select Stocks, Mutual Funds, Bonds, Other
Select Add more sales
You will see the screen titled OK, what type of investments did you sell? Be sure to select Other to report your 1099-S.

Proceed through the questions and enter the information as prompted.

Re: I sold land & a portion of the proceeds were placed in escrow, to be released after one year....

Critter-3 — Sat, 20 Mar 2021 21:59:27 GMT

The amount held in the escrow is immaterial to the sale ... you must report the entire sale amount in 2020 and the release of the escrow in 2021 will not be reported at all.

Re: I sold land & a portion of the proceeds were placed in escrow, to be released after one year....

dbarn72 — Sat, 20 Mar 2021 22:36:21 GMT

The amount in escrow IS material. It is equal to 10% of the selling price of the property so why would I report the entire amount as the selling price if I do not have access to the funds?

Re: I sold land & a portion of the proceeds were placed in escrow, to be released after one year....

dbarn72 — Sat, 20 Mar 2021 23:15:54 GMT

The amount in escrow IS material. It is equal to 10% of the selling price of the property so why would I report the entire amount as the selling price if I do not have access to the funds?