How to Report Vacant Land Sale on Taxes with 1099-S Form?

Yes, you need to report your vacant land sale on Schedule D (Capital Gains and Losses). Since you held the property for more than one year (2016 to 2023), this is considered a long-term capital gain. For the "covered vs. not covered" question, real estate transactions are typically "not covered" - this refers to whether the transaction is subject to basis reporting by brokers. Real estate doesn't fall under those requirements that apply to securities. Make sure you have documentation showing your purchase price and any improvements you made to the land that would increase your cost basis. The difference between your selling price ($21,500) and your cost basis (at least $12,000) will be your capital gain, which is taxable. When entering this in Cash App Tax, look for an option to add a real estate transaction or "other asset" sale rather than stocks or securities specifically.

I went through this exact situation last year and it was so frustrating! After spending hours trying to figure it out myself, I ended up using https://taxr.ai and it really helped. You upload your 1099-S and other documents, and it analyzes everything to tell you exactly how to report it. In my case, it confirmed I needed Schedule D but also showed me I could include some expenses I didn't know were deductible (like a survey I had done years ago). The site walks you through what forms you need and gives step-by-step instructions for using Cash App Tax. Definitely worth checking out if you're stuck.

Just wanted to follow up about my experience with taxr.ai after I questioned it earlier. I decided to try it with my similar land sale situation, and I'm actually impressed. It caught that I had made some improvements to the vacant lot (clearing and grading) that I could add to my basis, which saved me about $600 in taxes. The step-by-step guidance for reporting on Schedule D was really clear, and it even gave me specific screens to look for in Cash App Tax. It explained why my land sale was "not covered" and walked me through all the date entries. Much more helpful than the generic articles I was finding online.

If you're having trouble getting this figured out with Cash App, you might need to talk directly with the IRS. I spent THREE DAYS trying to get through to someone at the IRS last year for a similar question, and it was impossible. Then I found https://claimyr.com and used their service (there's a demo video at https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in about 20 minutes instead of waiting on hold for hours. The agent confirmed exactly how to report my land sale and what schedule to use. Honestly, getting that official confirmation directly from the IRS gave me peace of mind that I was doing it right.

I hate to admit when I'm wrong, but I have to follow up on my skeptical comment. After struggling for days with my land sale reporting, I gave Claimyr a shot. I was connected to an IRS agent in about 30 minutes, which honestly felt like a miracle after my previous attempts. The agent walked me through exactly how to report my land sale on Schedule D and confirmed it was a long-term capital gain (not covered). She even explained some nuances about basis adjustments I wouldn't have known. Having that direct confirmation from the IRS gave me confidence to file without worrying about doing it wrong. Definitely a game-changer for complicated tax situations where you need authoritative answers.

Don't forget that you may need to file a state tax return too, depending on where the land was located! Different states have different rules about reporting real estate sales. Some follow the federal treatment, but others have their own special forms.

If you sold for $21,500 and bought for $12,000, don't forget that's a $9,500 profit which is subject to capital gains tax! Since you held it more than a year, you'll get the lower long-term rate (0%, 15%, or 20% depending on your income) instead of your regular income tax rate.

One thing that hasn't been mentioned yet is the Net Investment Income Tax (NIIT). If your modified adjusted gross income exceeds certain thresholds ($200,000 for single filers, $250,000 for married filing jointly), you may owe an additional 3.8% tax on your capital gains from the land sale. This is separate from the regular capital gains tax and catches a lot of people off guard. The good news is that with a $9,500 gain, it's unlikely to push most people over those income thresholds unless they already have substantial other income. But it's something to be aware of when planning your tax strategy, especially if you're considering selling other investments in the same year. Cash App Tax should automatically calculate this if it applies to your situation, but it's worth understanding so you're not surprised by an unexpected tax bill.