Inherited cows and tract Land

[wm76006]

During year 2022, My wife inherited 10 cows and 37 acers (Land Tract 2B-A) in TEXAS, after her dad died, in the same year sold the 10 cows to her brother who also rented the 37 acers from my wife to raise the 10 cows he bought and his own cows too. The Brother paid for the 10 cows and for renting the Tract Land by check.

My question:

Is that money taxable? and if it is, where exactly should we report it on our 2022 tax filing?

{Note we are using TurboTax Deluxe 2022}.

Many thanks for your kind attention and assistance.

[PattiF]

The sale of the cows and the land rental should be reported on your tax return. TurboTax Premier is needed to record the grazing land rental on Schedule E. You will need to upgrade to Schedule E. Here is a TurboTax Help article with instructions on how to upgrade TurboTax to Premier.

The sale of the cows is entered as an investment sale. The value of the animals would be determined as the fair market value when your wife's dad died. The sale to her brother took place in the same year so there would not be a profit to report on the sale of the cows. 

The sale would be entered using these instructions:

In your return, go to Investment Income

• Choose Stocks, Mutual Funds, Bonds, Other and start
• Answer Yes that you sold investments for the year
• Answer No to the 1099-B question
• Choose the investment type, everything else
• Description  - Livestock
• Sales Proceeds -
• Date Sold- 
• Date Purchased - date inherited
• Tell us how you acquired the property, purchase
• Enter your cost of the items (the cost would be the same as the sale pric

The land rental would be entered on Schedule E as receiving cash rent for pasture. There is no depreciation for land. Any expenses for upkeep could be deducted on the Schedule E. 

1. After signing-in to your account, select the Federal Taxes tab.
2. Select the Wages & Income tab.
3. Scroll down the screen to Rental Properties and Royalties, and click the Start or Update button and begin to enter your rental information.