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starhawke380
New Member

Tax question about selling land

I sold a 10ft strip of land on the front of the property (primary and only residence) to the city so they could install a sidewalk on the street I live on.  Im not sure where to put the information from the 1099S they just now sent me.
1 Best answer

Accepted Solutions
KrisD
Intuit Alumni

Tax question about selling land

Technically the 1099-S which is for the "sale" of the easement, does not get reported as a sale or income, rather it is subtracted from the property's basis.

Since it was reported on a 1099-S, the IRS will be looking for it to be reported.

You can either:

Not report it, and subtract it from the basis of your property and be ready to explain everything to the IRS if they inquire.

Report it, and report your basis as the same as the proceeds, so there is no gain realized.

I would not report it as sale of a main home, since that might raise a red flag if you do decide to sell your main home within the next 2 years.

To Report:

  1. Open your return in TurboTax.
    (To do this, sign in to TurboTax and click the orange Take me to my return button.)
  2. In the search box, search for sold second home (use this exact phrase) and then click the "Jump to" link in the search results.
  3. Answer Yes on the Did You Sell Any Investments in 2016? screen.
    • If you land on the Here's the investment sales info we have so far screen, click Add More Sales.
  4. Answer No to the 1099-B question.
  5. On the next screen, select  Land. Click Continue.
  6. Follow the on-screen instructions to completion.

Remember to report the sale proceeds as the basis so there is no gain.

If you do sell the remaining property, remember that you would need to subtract that amount from your total, or original, basis.

Of course, if you were to sell this property, and it was your primary residence that you owned and lived in for 2 of the last 5 years, you may be excluded from reporting capital gains if sold at a profit.


View solution in original post

1 Reply
KrisD
Intuit Alumni

Tax question about selling land

Technically the 1099-S which is for the "sale" of the easement, does not get reported as a sale or income, rather it is subtracted from the property's basis.

Since it was reported on a 1099-S, the IRS will be looking for it to be reported.

You can either:

Not report it, and subtract it from the basis of your property and be ready to explain everything to the IRS if they inquire.

Report it, and report your basis as the same as the proceeds, so there is no gain realized.

I would not report it as sale of a main home, since that might raise a red flag if you do decide to sell your main home within the next 2 years.

To Report:

  1. Open your return in TurboTax.
    (To do this, sign in to TurboTax and click the orange Take me to my return button.)
  2. In the search box, search for sold second home (use this exact phrase) and then click the "Jump to" link in the search results.
  3. Answer Yes on the Did You Sell Any Investments in 2016? screen.
    • If you land on the Here's the investment sales info we have so far screen, click Add More Sales.
  4. Answer No to the 1099-B question.
  5. On the next screen, select  Land. Click Continue.
  6. Follow the on-screen instructions to completion.

Remember to report the sale proceeds as the basis so there is no gain.

If you do sell the remaining property, remember that you would need to subtract that amount from your total, or original, basis.

Of course, if you were to sell this property, and it was your primary residence that you owned and lived in for 2 of the last 5 years, you may be excluded from reporting capital gains if sold at a profit.


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