capital gains on vacant land sale

[gmichney]

We sold vacant land that we have owned for 30+ years in 2024. During the sale the buyers title company discovered a problem with the transaction. We bought the land from two people, one had died so we bought it from his son who had inherited it. The title company discovered the his father did not have a right to sell in his will and flagged the title. To clear the title we contacted all the heirs involved and got them to sign off on the sale. We filed a case with the probate court and are awaiting for there decision to clear the title. In the meantime we transferred the property to the new owners for most of the sale price with an amount held in escrow by our lawyer until the probate case closes. My question is should I file capital gains in 2024 or wait until the probate case is done and the title is cleared. We did not receive a 1099-S. I don’t know if there will be additional legal costs to complete the sale.

[CatinaT1]

I would say you need to wait until the sale is final. You really don't know what your sales expense is at this point and that will be used in determining your basis in the property used to calculate any gain. Right now the deed is still in your name until the title is able to be conveyed to the new owners.

[gmichney]

Thanks for the quick reply. There is a quitclaim deed that was assigned to the buyer and recorded with the registry of deeds. The escrow that our lawyer holds will not be released until the probate case is done. This was the solution to uncloud the title. Since there was a trust involved from the original sale 30 years ago and the trustees have died we filed an equity complaint and got all the remaining heirs to sign off on any claims. The probate court can resolve  this to uncloud the title. We are waiting for our case to be heard, it’s been months and the courts are backlogged. We have not received a 1099-S for 2024.