It depends on how the land was used. If it was vacant land, held for investment; you may deduct the capital loss.
Type> 1099-S, sale of property other than main home <in the find (search) box or
TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
-Stocks, mutual funds, Bonds, Other (Real estate is other)
Answer no, when asked if you got a 1099-B. then follow the interview. When asked if used for business or rental, check "other investment purpose"
Capital losses are first used against capital gains, on Schedule D. Any excess is used to reduce ordinary income, up to $3000. Any loss above $3000 is carried forward to future years.
For inherited property, your cost basis is the fair market value on the date of death of the person you inherited it from. You may add the carrying cost* for the year of sale to your cost basis.
* The carrying costs (e.g. insurance
& maintenace) of investment property are deductible as investment expenses,
but are subject to being a misc. itemized deduction also subject to the 2% of
AGI threshold. Real estate (property) tax may be deducted on
schedule A, under taxes, without regard to the 2% rule.
Alternatively, taxpayers can elect to capitalize (add it to your cost basis) the carrying costs of unimproved and nonproductive real property. The election is made with the tax return by its due date, including extension, by attaching a statement. You cannot wait until you sell the property, but must make that election each year.