Selling and buying property in same year

[dslutz225]

I sold a piece of property in TN last year in Feb. I live in LA, and that is my permanent residence. I also bought another piece of property in MS in march of 2024 because I have family in that area. My question is I sold TN property for 80k and then purchased MS property for 55k. What forms do I use to add this info to my tax return? Also I put extra money into both properties to add a portable building and foundation. Are those expenses added to anything from an income tax perspective? Buying and selling property from a tax perspective is all new to me. Any advice is appreciated.

[Mike9241]

 My question is I sold TN property for 80k

you report the sales in the investment section of your federal return. Tennessee does not have an income tax so there is no return to file.  if this was rental property you would report the sale through Turbotax's schedule E worksheets. The ones reporting the assets

and then purchased MS property for 55k.

what was it used for? personal or rental . personal - nothing gets entered other than possibly mortgage interest and real estate taxes paid on schedule A. if rental, it gets reported on Schedule E.

I put extra money into both properties.

TN: if these were capital improvements (from your description they appear to be), you would include them in the cost provided the property was not a rental. if it was a rental you need to file form 3115 to adjust for the depreciation you should have taken. if you don't, the tax laws require you to recapture depreciation allowable so you would need to recapture as income, a deduction you never took.  

MS if not a rental keep a record for when you sell. if capital improvements or costs and it's a rental these costs would get entered for depreciation purposes.  A MS nonresident return may be required if it is a rental

What forms do I use to add this info to my tax return? Also I put extra money into both properties to add a portable building and foundation. Are those expenses added to anything from an income tax perspective? Buying and selling property from a tax perspective is all new to me. Any advice is appreciated.

[dslutz225]

Thanks for reply. Neither of these were rental properties. Both were for personal use.

[Cynthiad66]

Based on the amounts of the sales, most likely there is no tax due on these transactions.  Also, since they were personal use only, these sales were not taxable.  However, you still want to report them as follows:

If you sold your main home

1. Sign in to TurboTax and select Pick up where you left off.
2. Select Search, enter sale of home, and select the Jump to link in the search results.
3. Answer Yes to Did you sell or have your home foreclosed in 2023?
4. Enter the address of the home you sold on the next screen, and Continue.
5. On the next screen, answer Yes to Did you receive a Form 1099-S that reported this sale? and enter the info from your 1099-S.
6. On the next screens, follow the on-screen instructions to continue entering the info from your 1099-S.

Profits of up to $250,000 ($500,000 on a joint return) on the sale of your home may not be taxable if it was your primary residence for two of the last five years. We’ll ask you some questions about the sale of your home to see if you qualify.

If you sold other real estate

Select which type of sale you made for step-by-step instructions:

• Sale of a second home, an inherited home, or land
• Sale of a rental property
• Sale of standing timber

Is the Money From Sale of Property Taxable

@dslutz225