Farmland Sale Describe This Asset

No, that is not correct. The sale of inherited farmland would be entered under wages and income as investment income that is inherited land. The rental aspect of the farmland doesn't come into play for the sale of the property. If the farmland was rented out in 2022, that will need to be entered separately on Schedule E. Land is not depreciated. Income and expenses for the rental would be included on Schedule E.

Click on Federal > Wages & Income

1. In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.  If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far.  Click on the Add More Sales link. 
2. If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 2022?  Click the Yes box.
3. On the screen,  OK, what type of investments did you sell? mark the Other box and click Continue.
4. When you get to the screen, Now we’ll walk you through entering your sale details, enter the details of the sale.  You will be able to select the type of investment in the first box [second home, land, etc.]  
5. Enter the requested information and click Continue when done.

You will need to determine the cost basis for the land. The basis for inherited property is the value on the date of death. You may be able to use the tax assessor's office or know some local real estate agents that can provide a better basis. Included in the basis will also be your share of the selling expenses. 

Other expenses like improvements and charges listed on the settlement statement are added to the basis.

These include:

• Title fees
• real estate commissions
• documentary stamps
• credit report costs
• costs of an abstract
• transfer taxes
• home inspection
• flood certificate
• attorney fees, etc.

Please see this from the IRS about inherited property where they discuss your basis in the property at the beginning of the answer.