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Land Sale Under Eminent Domain

Discuss anything to do with property law - buying, selling property

Land Sale Under Eminent Domain

Postby Aram » Sat Dec 10, 2016 7:35 pm

s About Taxes)/Land sale under eminent domain Advertisement Expert: John Stancil, CPA - 4/2/2010 The school district is building a school near my house and they need to widen the road.  When the school district proposed buying a strip of land from the front property to widen the road, he put this way.  You can either do it voluntarily or we can invoke eminent domain and I would have to sell the land anyway.  I chose to voluntarily sell the front part of my property to the school district.

My question is, how do I declare the amount on the 1099 on my taxes.  The school district told me that I can declare the amount over three years.  Is this correct?  I am doing my own taxes through Turbo tax, and I am unable to find this tax code.

Could you please guide me how to proceed.

Thank you,

Josefa Price
Aram
 
Posts: 42
Joined: Mon Jan 06, 2014 8:50 pm

Land Sale Under Eminent Domain

Postby Audel » Wed Dec 14, 2016 6:04 am

s About Taxes)/Land sale under eminent domain Advertisement Expert: John Stancil, CPA - 4/2/2010 The school district is building a school near my house and they need to widen the road.  When the school district proposed buying a strip of land from the front property to widen the road, he put this way.  You can either do it voluntarily or we can invoke eminent domain and I would have to sell the land anyway.  I chose to voluntarily sell the front part of my property to the school district.

My question is, how do I declare the amount on the 1099 on my taxes.  The school district told me that I can declare the amount over three years.  Is this correct?  I am doing my own taxes through Turbo tax, and I am unable to find this tax code.

Could you please guide me how to proceed.

Thank you,

Josefa Price
Audel
 
Posts: 42
Joined: Sun Mar 30, 2014 2:18 pm

Land Sale Under Eminent Domain

Postby Ulfr » Sat Dec 17, 2016 3:48 am

Josefa,

Thanks for your question.

Unless you are receiving the money over three years you must report it all in the year received.

Even though you sold it "voluntarily" it is considered an involuntary conversion.  Although this part probably does not apply to you, if you buy replacement property within two years, you do not have to pay tax on the gain from the sale.

Since it is your primary residence, if you sell the home within two years, you can include this sale as occurring with the sale of the residence and exclude up to $500,000 in gain.  However, this may not apply to you either.

The final scenario is that you do not sell and do not buy replacement property.  In this case, you report the sale on Form 4797 and Schedule D.  You will show the sale price and subtract your basis. Basis is an amount of your cost of the land allocated to the portion being sold.  You make the allocation.

Hope this helps.

John Stancil, CPA
Ulfr
 
Posts: 50
Joined: Tue Jan 14, 2014 1:39 am


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