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Solved

Declaring capital gains on sale of vacant land

Forum|Forum|4 years ago
March 15, 2022
2 replies
0 views

A few weeks ago I sold some vacant land, and I would like to know how I can declare capital gains. Is there any way I can use the TurboTax software for this? Also, should I prepay taxes on the capital gains?

Capital Gains

Best answer by MinhT1

Capital gains on the sale of vacant land are taxable.

If you have held the land for one year or less before selling it, the capital gains are short-term and are taxed at the ordinary income rate.

If you have held the land for more than one year, they are long term-capital gains and are taxed at a more favorable rate, generally 15%.

If you owe capital gain taxes, you should consider paying estimated taxes during the year to avoid the penalty for underpayment of estimated taxes.

Please read this TurboTax Help topic for more information.

you are a little early. the sale seems to have been in 2022 so it goes on the 2022 tax return due 4/15/2023.

for 2023, you will not have federal penalties if your withholding and timely estimate tax payments are 90% of your 2022 tax or 100% of your 2021 tax (110% if your 2021 adjusted gross income was over $150,000

yes you can pay now, but it's difficult to calculate what your 2022 tax bill will be,

safe could be paying in federal taxes equal to 20% of your gain. but that's just a guess.

you can send in a form 1040 ES or use IRS direct pay

MinhT1Answer

Capital gains on the sale of vacant land are taxable.

If you have held the land for one year or less before selling it, the capital gains are short-term and are taxed at the ordinary income rate.

If you have held the land for more than one year, they are long term-capital gains and are taxed at a more favorable rate, generally 15%.

If you owe capital gain taxes, you should consider paying estimated taxes during the year to avoid the penalty for underpayment of estimated taxes.

Please read this TurboTax Help topic for more information.

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This part is not answered:

" Is there any way I can use the TurboTax software for this?"

I for one cannot see any way to enter LAND as an asset.

Anyone have any insight?

Employee

Yes, TurboTax (TT)can handle this. With the online editions, you may have to upgrade. TT will prompt you to upgrade.

In TurboTax (TT), enter at:
- Federal Taxes tab (Personal in Home & Business)

- Wages & Income

Scroll down to:

-Investment Income

-Stocks, mutual funds, Bonds, Other (Real estate is other)

Answer no, when asked if you got a 1099-B. then follow the interview.