Where do I report the sale of farmland (share cropped, not as an operator)

Forum|Forum|5 years ago
March 9, 2021
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I recently sold about 1/2 of some farmland that I own (jointly with my sister, inherited from grandfather 50 years ago). Yes, the Capital Gains will be huge - but I am confused as to where to report it.

The Title company reported the sale of the farmland on a 1099-S. I guess that is OK because the 1099-S is used to report "Proceeds from Real Estate Transactions", although I thought 1099-S's were used mainly for the sale of your residence.

Anyway, the farmland was not purchased as an Investment (i.e. was inherited, gifted) and we have been receiving income from the farm via the sharing of crop proceeds for the past 50 years.

In searching the Turbotax community, I have seen advice on reporting the sale in the Farm Income and Farm Rental section under Business Items OR to report it in Stocks, etc., "Other" section under Investment Income. Is there a clear cut answer to my question of where to report the sale. I am leaning towards the Investment Income section since it says to be used to report "Real estate, second home or land (not your main home)".

And I have a secondary question. Even though the farmland was jointly owned, the income was not shared equally - so is it OK (even though no "formal" agreement exists) to also report the CG unequally (i.e. 60/40 or 70/30).

ron in shawnee

ToddL99

Report the sale in the Investment Income section of TurboTax - see Where do I enter the sale of a second home, an inherited home, or land on my 2020 taxes? for instructions on both TurboTax Online or TurboTax Desktop versions of the program.

Yes, you can allocate the proceeds (and capital gains) in whatever proportions reflect the actual ownership. One person can report 60% of the proceeds and 60% of the cost basis on their return, and the other can report the remaining 40% (proceeds and cost basis) on their return. Here are some sample screenshots to show what you will see in the interview.

roninshawneeKSAuthor

Todd-

Thanks a lot - exactly the kind of confirmation that I wanted, needed.

And really thanks a lot for the screen shot BECAUSE:

It does not match the procedure in my 2020 TurboTax Deluxe - i.e. when clicking on the "Add More Sales", I get:

"Did you get a 1099-B or a brokerage statement for these sales?" - and when I click "No", after offering to let me "enter one sale at a time", I get the following screen:

I hope the screen shot made it into this Reply - I have been trouble with doing that.

Anyway, as you can see (hopefully), the information requested is identical to that in your screen shot (without the Box labels) - but everything else matches, exactly.

I haven't done the real thing yet, but let me ask - does this entry, transaction just show up on the Form 8949 just like and along with my stock transactions.

Todd, thanks for the help - and as I said, your screen shots were a savior.

ron in shawnee