I sold a parcel of property as a subdivision, how do I report it in TT ?

[Jarheadmik1]

Sold a parcel of my property as a subdivision . The property is a rental property. How do I report it in TT.2017?

[Carl]

Please give more details, as the lack of clarity on my end allows for 3 possibilities.
By "parcel" do you mean a lot? Or do you mean something the size of several football fields that you sold to a developer who's going to make it a part of a housing project they are planning?
"this property is a rental"
So you sold a rental property? If you sold a "parcel" that indicates raw land with nothing on it but trees maybe. Reporting the sale of raw land is done differently than reporting the sale of rental property.
If there is a structure on this parcel that you sold, who was the last person to move out of that structure before you sold it? You? Or a tenant you were collecting rent from?  Exactly when did that tenant move out? some month of 2016? 5 years ago and the house has sat empty since? Maybe the tenant was still living in it on the day you closed on the sale?

I'm also curious how you sold a parcel *AS* a subdivision. Did you sell only a part of a lot that you own?

[Hal_Al · Accepted solution]

In TurboTax (TT), enter at:
- Federal Taxes tab

 - Wages & Income

Scroll down to:

-Investment Income

   -Stocks, mutual funds, Bonds, Other (Real estate is other)

 Your problem is in determining the cost basis of the split off parcel. You may have to pay for a professional appraisal to get that. But, the usual way is best explained by example:

You bought a rental house in 1999 for $100,000. The 1999 property tax bill accessed the building at $80.000 and the 3 acres of land at $20,000. In 2017, you split the lot into two parcels; 1 acre of vacant land and 2 acres with the house. The 1 acre is 33% of the total  land. 33% of $20,000 is $6600.  $6600 is your cost basis in the 1 acre parcel. You then sold the 1 acre for $50,000. Your capital gain is 50,000 – 6600 = $43,400.  Your remaining cost basis in the 2 acres with rental house is now 100,000 – 6600 = 93,400

[Carl]

The above is assuming you did NOT sell residential rental real estate. (Who you sold it to doesn't matter)