Reporting of Sale of Two Lots Bought Separately

[jnindel]

What is the name of your state? California.

I purchased two lots through separate transactions and sold them together a year later under one transaction. What is the best way to report the sale of both lots when they are sold together as one? One lot had a house on it, the other lot was vacant and connected to the lot that had the house on it. I have an overall profit on the sale of the two lots (and house). Thanks.

 

[Taxing Matters]

Assuming that the property with the house on it was not at any time your principal residence and assuming no depreciation recapture issues then you could simply report it as one sale and use the combined basis for both properties as the basis for computing the gain. If either of my assumptions are not correct then you may need to report each sale separately and allocate the purchase price to each property based on their relative fair market values.

 

[jnindel]

Your assumptions are correct! Thank you very much.

 

[LdiJ]

Assuming that the property with the house on it was not at any time your principal residence and assuming no depreciation recapture issues then you could simply report it as one sale and use the combined basis for both properties as the basis for computing the gain. If either of my assumptions are not correct then you may need to report each sale separately and allocate the purchase price to each property based on their relative fair market values.

Did you mean sales/selling price there? I think that you did.

 

[jnindel]

I was referring to the sale of both lots.

 

[LdiJ]

I was referring to the sale of both lots.

I was referring to the bolded information in the post I quoted. I was not referring to anything that you said.

 

[Taxing Matters]

Did you mean sales/selling price there? I think that you did.

The price the OP received for the property. Sales price for him/her, purchase price for the buyer. All depends on which side you're on.

Your assumptions are correct! Thank you very much.

Then you should be good in reporting it as a single sale.