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» From: Winchester, TN Dear TaxMama, We sold idle commercial property last year and used the funds to build our first home. Can you tell me what IRS form we need?!. You have a very informative site, but I did not see this question asked. Thanking you in advance, Luba Dear Luba, Thank you! You will be using Schedule D to report the sale. Things to remember: If you never took deductions for the property taxes you paid all the years you owned it - add up the taxes and add them to your purchase price. Also, if you spent any money on zoning or improvements to the property (bringing in utilities, fencing,etc.) add those costs to the purchase price. Pause, think about any expenses you may have had with respect to the property, that you were never able to deduct. (Interest, for instance...) Be sure to add all those expenses to the 'cost or other basis' you put in column (e). That will help you greatly reduce your profit - and the related tax. As to the fact that you used the money to build your home...even a first home. That's irrelevant for tax purposes. But it is delightful for you! Enjoy your new home. Best wishes Eva Rosenberg Your TaxMama  |
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