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Discussion Forum Index --> Tax Questions --> Land sold to relative
Jatc (talk|edits) said:
| 1 February 2006
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| My husband bought land and a mobile home back in 1990 for $21,000. We just sold it to his brother and got a 1099-S for $28,153.81. Since 1990 we have added a septic tank and water connection to the front acre and purchased and fixed up another mobile home on that same property. This costs us approx. $8200 in improvements. The land appraised at $30,000 without counting the two mobile homes. What do we do with this 1099-S? Any loss to claim?
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DR BRISKET (talk|edits) said:
| 2 February 2006
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| Losses on property sold to a relative are non-deductible. As far as what to do with the 1099-S, I would report it on Schedule D showing sale and cost both at $28,154. This way, the IRS will see that you have reported the sale when they match the 1099-S to your tax return.
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Hiloagent (talk|edits) said:
| 2 February 2006
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| This is called a "gift sale". I agree to also report it with no loss on Sched D. However, you may even need to file a gift tax return if the fair market value/ appraisal of land AND homes were more than $11,000 above what you sold it for.
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Warren (talk|edits) said:
| 2 February 2006
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| I agree with Hiloagent. But be aware that the gift tax exclusion of $11,000 (in 2005) is a per person exclusion. If you and your husband sold to his brother and his brother's wife it is possible to exclude $44,000 on this deal.
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