Sale of investment residential Property at a loss

[millie2312]

I bought a lot in 2023 and began building an investment house in June of 2024.  The house was finished in April of 2025, and I sold it in July at an unexpected loss.  How the amount reported on the 1099-S is added to my tax return?  Can I claim the loss?

[ThomasM125 · Accepted solution]

You can deduct the loss as a loss on investment if you never used the house for personal purposes. You should report the Form 1099-S as an investment sale as follows:

You enter investment sales in the Wages and Income section of TurboTax, then Investment Income, then Stocks, cryptocurrency, Mutual Funds, Bonds, etc... Skip the section where it asks if you want to upload your tax documents. Choose Other for the type of investment sold. You'll come to a screen where you can enter in your sales proceeds and cost basis. On that screen, choose Land (other investment purpose) for the investment type sold. Enter in the proceeds as reported on the Form 1099-S you received and enter as the cost what you spent on the property, including deductible closing costs.

[millie2312]

Thank you very much.  I will go back and do it as per your instructions.