topic I owned a vacant lot for many years under my business name in the hopes to building on it for profit which never happened. I ended up selling the lot last year at a loss. Can I claim the entire amount of the loss? in Business & farm

I owned a vacant lot for many years under my business name in the hopes to building on it for profit which never happened. I ended up selling the lot last year at a loss. Can I claim the entire amount of the loss?

Rohitnaval — Fri, 19 Mar 2021 20:41:22 GMT

which section of the tax return would I use to claim this loss?

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

RayW7 — Fri, 19 Mar 2021 21:36:19 GMT

You'll enter this under the Federal Taxes tab (or Personal, if working in TurboTax Self-Employed/Home & Business), then select Wages & Income, then Investment Income, then Stocks, Mutual Funds, Bonds, Other.

When you sell a capital asset, the difference between its cost basis and the selling price results in a capital gain or loss.

A capital gain is when your asset's sales price exceeds its cost basis (in other words, you made money). Capital gains must be reported on your tax return.
A capital loss is when you sell the asset for less than its cost basis. Capital losses from investments can be deducted, but not those from personal-use assets, such as your home or personal vehicle.

Your total capital gains for the year minus your total capital losses results in either a net capital gain or a net capital loss.

Short term capital gains (gains on assets held one year or less) are taxed as ordinary income.
Long term capital gains (gains on assets held more than one year) are taxed at a more favorable rate than ordinary income.
Net losses are deductible, but only up to a maximum of $3,000 ($1,500 if married filing separately). Any capital losses you couldn't deduct this year can be carried forward and deducted on future tax returns. This is called a capital loss carryover.

-for additional information follow this link-

Capital Gains and Losses

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

Rohitnaval — Fri, 19 Mar 2021 21:50:49 GMT

Isn’t this considered business property? In which case allowing me to write off the entire loss amount?

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

Rick19744 — Fri, 19 Mar 2021 22:00:22 GMT

No. This appears to be an investment based on the limited facts.

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

Rohitnaval — Fri, 19 Mar 2021 22:15:56 GMT

My business is real estate development, what other facts would help clarify?

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

Rick19744 — Fri, 19 Mar 2021 22:27:11 GMT

What type of entity and return are you filing?

Do you purchase and hold land for sale?

Re: I owned a vacant lot for many years under my business name in the hopes to building on it for...

Rohitnaval — Fri, 19 Mar 2021 22:51:44 GMT

Yes I purchase and hold land for sale. What type of entity and return do I need to file? I’m thinking section 1231 gains or losses resulting in ordinary income / loss. 1231 assets by definition are depreciable real or personal property used in trade or business including land.