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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7220
Experience:  15years with H & R Block. Divisional leader, Instructor
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How do I claim a loss on piece of land I held for 7 years and

Resolved Question:

How do I claim a loss on piece of land I held for 7 years and sold for $58k less than the purchase price?
Submitted: 8 months ago.
Category: Tax
Expert:  Robin D. replied 8 months ago.

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
You will report the sale using Form 8949 and Schedule D.
When you enter the cost (or basis) and the sale price you will have calculate the loss and carry that to the Schedule D.
If you do not have any other gains you will be limited to the loss amount you can use.

Robin D. :

You will be allowed to carry forward the loss you cannot use in the year of sale (if limited) till used up. Each year $3000 of the remaining loss can be carried forward and used against income (even wages).

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Customer:

Thanks Robin. I am clueless where to find form 8949 in TurboTax, perhaps this was not appropriate forum to ask the question. My search for claiming the loss in Turbo Tax led me to Just Answer Tax.

Robin D. :

Let check on TurboTax info and see if I can get you in the right doirection

Robin D. :

direction sorry

Robin D. :

One sec

Robin D. :

Here is what Turbo Tax says about entering sales in their program:


Don't worry! When you use TurboTax to prepare your taxes, we’ll ask you questions about your sales, figure out how much you need to report, and fill in all the right forms for you.


If you've already gone through the step-by-step interview and want to jump directly to the entry screen for this topic, follow these directions:



  1. Select the Federal Taxes tab (the Personal tab in the Home & Business edition).

  2. Select the Wages & Income subtab.

  3. Scroll down the Wages & Income screen until you see the Investment Income group.

  4. Click on the Start/Update button to the right of the Stocks, Mutual Funds, Bonds, Other category.

  5. Follow the prompts.

Robin D. :

Under #4 the other is what you are looking for

Robin D. :

The Turbo Tax program will then ask you questions about acquiring the land and selling

Customer:

checking

Robin D. :

It will then carry the info to the correct area of the return.

Customer:

ok I am there, just a moment please

Customer:

we originally going to build but of course that did not work out, so do I mark that the use was personal over investment?

Robin D. :

If you did not build on the property then investment can be used.

Robin D. :

I am so glad you were able to find the area for your entries.

Robin D. :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.

Customer:

Thanks but it is not giving me any loss to claim as an investment. ?

Robin D. :

Have you entered the cost and the sale price?

Customer:

yes

Robin D. :

Can you look at the 1040 and see a loss on line 13

Customer:

sorry I do not know how to get to the 1040 form

Robin D. :

Ok , I think you need to remove the entries you made and start from the top. This time go back to INCOME tab and let the program walk you through.

Robin D. :

Did you have a W2?

Robin D. :

The income section is the same place where you entered the W2.

Customer:

I did let them walk me through the process of claiming a loss under the income tab plus what you listed above. I do have a W-2.

Robin D. :

Did you list the land as personal?

Robin D. :

If you did then you will not be allowed the loss because personal use rules do not allow that.

Robin D. :

As long as this was raw land and you did not have a building you lived in it is not personal use.

Robin D. :

Go back through the steps and pay close attention to use.

Customer:

I went through the process again this time and it did show the $59k + loss with approx. $56k carryover to 2013. Great! It does not increase my refund much but $400 is better than nothing. So I carry it over year after year until there isn't a loss to carry over anymore?

Robin D. :

Yes. You will be allowed to carry over $3000 each year. Of course if you have a gain on some other asset you sale, more of the carry over can be used in one year.

Customer:

Awesome! Robin thank you for being persistent in finding the answer to my query. I was skeptical of using a service such as this, but you came through and solved my issue. You made a late 2012 extension filing much less painful than I anticipated it would be. THANKS!

Robin D. :

You are most welcome.
Your positive rating is always thanks enough.

Robin D. :

Best wishes

Robin D. :

If you’re a subscription customer, feel free to add me to your Preferred Expert Team so we can work together in the future

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7220
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and 2 other Tax Specialists are ready to help you

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