land sale proceeds

[Molokai]

Entering a land sale.  For Proceeds do I use the full price of the land, or the amount after the costs of the sale are deducted? It does ask for the cost basis. I just want to be sure I put in the right number. Thank you

[VolvoGirl]

You don't use proceeds at all.  The Net Profit or Loss is

sale price - fees minus

cost is purchase price + purchase fees + improvements 

[Mike9241 · Accepted solution]

for sales price you enter ids the proceeds as reported on 1099-S or gross proceeds.  if the IRS gets a 1099-S showing gross proceeds (that's what should be on the form) and you report net of selling expenses expect a letter from them and a bill because they will assume the sales price they got and the cost you reported are correct. this results in what the iRS thinks is an underreporting of the gain/loss.  then you have to deal with them to get it straightened out.  Your net gain/loss is correct but the IRS doesn't have all the documents to see that.  selling expenses are either added to cost or in some cases shown separately.