I've been capitalizing rather than deducting property taxes on vacant lots according to 1.266-1. I have sold the properties, what form do I fill?

[Elbarbar]

what form do I use for the capitalized carrying costs for the vacant lots now that they have been sold? I see that schedule E is for rental property, is there something different for investment lots of land specifically under 266?

[Mike9241]

it's a sale of capital assets so gets reported on form 8949/schedule D. the taxes are part of the basis for determining capital gain or loss. 

[Elbarbar]

Is there a section under the step-by-step of turbo tax premier software that I can enter it in on? Do I add it to the cost basis directly? or do I need to go into the forms section and add it on the 8949/schedule D worksheets manually?

[JamesG1]

When entering the sale of the investment, the cost basis should include the original purchase price plus any additions to basis.

Report the sale by following these steps: 

• Select Federal Taxes across the top of the screen.
• Select Wages & Income across the top of the screen.
• Select I'll choose what I work on.
• Scroll down to Investment Income.
• Select Start / Update to the right of Stocks, Mutual Funds, Bonds, Other.
• At the screen Did you sell any investments in 2022, select Yes.
• At the screen OK, let's start with one investment type, select Land, second home, personal items and select Continue.
• At the screen Tell us more about this sale, enter the information and select Continue.
• At the screen Now, enter one sale, enter the information.  Continue.
• At the screen Let us know if any of these situations apply to this sale, enter any information.  Continue.
• Review the information.  Click on the pencil icon to edit the information.  Then Continue.

@Elbarbar