Also, can we add horse fence and paving of the driveway to our cost basis?
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Was this just a residential property, or were you also using it for farming?
If you were using the property for farming, then you must separate the value of the house from the value of the land. As long as you were living in the house as your primary residence for two of the 5 years preceding sale, then you can exclude up to $250,000 gain on the sale of the house ($500,000 if filing married filing jointly). A loss is not deductible. You don't have to report the sale of the house if it falls within these parameters.
If you used the house for less than 2 of the preceding 5 years, then you must report the sale. The basis of the property would include the cost to build the new house, the cost to remove the old one, the costs of purchase and improvements you made to the property, including the fence and the driveway. Sale information would go on Schedule D.
If this was a farm, then you must report the profit or loss on the land sale (exclusive of the personal residence) on Schedule D.
Check this TurboTax article for more information about selling a house.
Was this just a residential property, or were you also using it for farming?
If you were using the property for farming, then you must separate the value of the house from the value of the land. As long as you were living in the house as your primary residence for two of the 5 years preceding sale, then you can exclude up to $250,000 gain on the sale of the house ($500,000 if filing married filing jointly). A loss is not deductible. You don't have to report the sale of the house if it falls within these parameters.
If you used the house for less than 2 of the preceding 5 years, then you must report the sale. The basis of the property would include the cost to build the new house, the cost to remove the old one, the costs of purchase and improvements you made to the property, including the fence and the driveway. Sale information would go on Schedule D.
If this was a farm, then you must report the profit or loss on the land sale (exclusive of the personal residence) on Schedule D.
Check this TurboTax article for more information about selling a house.
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