1099s recd on sale of land attached to homestead to the state. How to report and how to find the basis

[dkh]

Can you give more detail...   

Your client received 1099-S for proceeds from land sale - correct?

This land is/was part of the principal residence property - correct?   

The state purchased the land ?

[vickil45]

Yes to all your questions

[dkh]

I'll tell you what I've done when I've had clients land purchased by the state for widening roadways. 

I reported the sale proceeds and cost basis as same $$.   The taxpayer's principal property basis is then reduced by the sale proceeds.

[dkh]

Use Schedule D > 1099B Worksheet > Quick entry Table

[taxiowa]

You basically can use the section 212 exemption for personal home sale if you sell bare land either 2 years before or after personal home.  That is if it is adjacent land to personal home.

[vickil45]

Thank you!