What tax form do you use to report land sale? I sold some acres last year and my tax software confused me.

One thing that might help you is to track down your original settlement statement (HUD-1 or Closing Disclosure) from when you purchased the land 5 years ago. That document will itemize all the closing costs you paid, making it much easier to determine which ones can be added to your basis. From my experience, most of the fees listed on that settlement statement can be included - things like title insurance, attorney fees, recording fees, survey costs, and transfer taxes. The main exceptions are usually prepaid items like property taxes and homeowner's insurance (though with raw land you probably didn't have insurance). Also, don't forget that any improvements you made to the land over those 5 years (like adding utilities, grading, fencing, etc.) can also be added to your basis. Keep good records of everything - the IRS likes documentation if they ever come asking questions!

Anyone know if paying down the mortgage principal early counts toward your basis? I paid extra $12k toward my land loan to reduce interest.

Just wanted to add my experience for anyone else in this situation - I sold land last year and was able to include not just the original closing costs but also some fees I didn't initially think would qualify. Things like the lender's title policy, survey costs, and even the appraisal fee from my original purchase all counted toward my basis. One thing that really helped me was organizing all my documents chronologically - purchase closing statement, any improvement receipts during ownership, and then the sale closing statement. Having everything laid out made it much easier to identify what could be included in my basis calculation versus what were just regular ownership expenses. The key is distinguishing between costs that added to the property's value or were necessary for acquisition (which increase basis) versus ongoing expenses like property taxes, insurance, or maintenance (which don't). When in doubt, keep the receipt and document it - it's better to have records you don't need than to miss legitimate deductions.

So is code 201 like a yellow flag or a red flag? Kind of like when your doctor says they found something "interesting" on your test results but won't tell you what it means until you come in for another appointment? Just wondering if this is something I should be actively worried about or just waiting for their letter.

Code 201 is more of a yellow flag than a red flag - it just means they're making an adjustment and will send you a notice explaining why. I've seen this code three times over the years, and twice it was actually in my favor (they found credits I missed). The key thing is to wait for the actual notice letter, which usually arrives within 1-2 weeks of the code appearing. Don't stress too much about it - unlike some other codes that indicate holds or delays, 201 just means they're communicating with you about a change to your account. Keep checking your mailbox and you'll have your answer soon enough.

Just a heads up - joint tenancy with survivorship can create MAJOR headaches if one owner wants to sell and the other doesn't!!! Me and my mom had a rental together with JTWROS and when I needed to sell my half for emergency medical bills, it was a nightmare. Had to threaten partition action in court to force a full sale. Maybe consider tenants in common instead?? At least then you can sell your share without court drama if needed.

As someone who's been through similar joint ownership complications, I'd strongly recommend getting a written co-ownership agreement in place ASAP, even though you already have the deed. This should specify your 60/40 economic split, how decisions get made about the property, what happens if one person wants to sell, and how you'll handle major repairs or improvements. For the tax side, your current approach of reporting based on your actual investment percentages (60/40) is generally correct - just make sure you're consistent with both income AND expenses in that same ratio. The joint tenancy language on the deed is more about legal ownership rights than tax reporting. One thing to watch out for: if either of you dies, the surviving owner gets a "stepped-up basis" on the deceased owner's share, which can be really beneficial for capital gains purposes. But if you're young and healthy, the inability to easily sell just your portion (as others mentioned) might be more of a concern than the survivorship benefits. Consider whether converting to tenants in common or setting up an LLC might give you more flexibility while you're both alive.

22 Has anyone tried using a DBA (doing business as) name on their W-9 instead of their legal name? I've heard mixed things about whether this is acceptable. I'm a sole proprietor without an LLC right now.

I've been dealing with this exact privacy concern myself! One thing I learned is that even if you form an LLC for privacy, you need to be consistent with how you report your business name across ALL your tax documents - not just the W-9. If you put your business name on Line 1 of a W-9 but then file your taxes differently, it can trigger IRS matching issues and potentially lead to backup withholding or compliance letters. The key is making sure your W-9, any 1099s you receive, and how you file your tax return all align. For maximum privacy while staying compliant, I'd recommend consulting with a tax professional about the best business structure for your specific situation. The upfront cost of getting proper advice is way less than dealing with IRS complications later.