Tax question on raw land sales.. HELP!

[sherab]

Hi folks! I am not sure what my reporting requirements are to the tax man for a land sale I did.
I bought 10 acres for $21,000, held it for a year and a half and then after some improvements to it to turn it into a building site, resold the land for $30,000.

I ended up getting a 1099-S for $30,000 in gross proceeds but after subtracting the money I spent improving the place, my $21,000 came up to more like $27,000.

It was a small profit.

Question now is filing. Does anyone have any insight into how I report this to uncle sammy on taxes? I am intent on keeping this as a straight "bought-raw-land-and-resold-raw-land" so it isn't considered a primary residence since I am looking to grab the 8,000 new housing credit in a few months.

Anyone know what forms and schedules are involved besides my 1040.

Many thanks!
Julian

[Squirl]

I don't believe if you improved land it would make it a residence.  It is like any other capital investment. If this is not your primary source of income I would think it was a capital gain for the sale price less the total investment.  If you held it for more than 1 year I would treat it as long term.  No matter what you will probably still get audited in a few years so have your receipts ready.  All 1099's go to the IRS. 

Disclaimer.  This is not legal advice.  Please seek the advice of a CPA or Attorney if you need to hold someone liable for advice.

[Redoverfarm]

You might want to go straight to the horses mouth for this one.  Not real sure how much you can inquire on line but it may give you the right direction.

http://www.irs.gov/app/officeLocator/index.jsp

I would imagine that it has something to do with Capital Gains.

http://www.irs.gov/taxtopics/tc409.html

Just might have to search their site or go to "Contact us" to get the right answer.  Well at least the right answer for the day.

[glenn kangiser]

They don't even guarantee right answers as most of them don't know either.   

[poppy]

I did a similar thing back in '04.  I reported it on Sch. D of the 1040 form.  Since I held it for more than a year, it was a long term capital gain.  My tax software lead me through the process.

Be sure to add in all expenses, including any realtor fees.

You bought and sold real property and it is certainly not a residence.

This is not legal advise and should be considered worth what you paid for it.

BTW, I wouldn't be worried about an IRS audit, but you do need to keep receipts, just in case.

The back of that 1099 may say where it is to be reported.