1099-S for land sale
I purchased a home in 2022 that had a large side lot contained within the boundary. The land was subdivided in 2024 and an additional lot was created and sold in 2024. The lot was sold for 180,000 but gross proceeds on 1099-S says 90,000. I’m unsure what to put for the land value of land at purchase.
Comments
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Hello Rustyhurley86:
To calculate the value of the land when you purchased the home, you might consider using the following method:
1. Obtain the assessed values from the county assessor's website in order to ascertain the assessed land value and the total property value.
2. Divide the assessed land value by the total assessed value to get a percentage.
3. Using the percentage you calculated in step 2 above, multiply the home’s purchase price by that percentage and the resulting amount should give you a value for the land.
In your post, you indicated that the land was later subdivided after you purchased the property. Assuming the property was evenly sub-divided, you can take 50% of the land value calculated above and use that amount as your cost basis for the lot that was sold. However, if the sub-division was something other than a 50/50 split, then adjust your cost basis accordingly.
If the lot was sold for $180,000 and yet the 1099-S reflects gross proceeds of $90,000, you will probably need to get a corrected 1099-S, or at least an explanation from the person(s) who prepared the 1099-S for the apparent discrepancy between sales price and gross proceeds reported.
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