I need some Tax Help?

Question

I didn’t work at all for 2006 but I did sell a couple acres of land. What forms do I need? Do I need to report this to the IRS?

Answer 1

You will need a form 1040, Sch D and the booklet. Without knowing the details on your ground I can only tell you this. You need to determine its basis; what you paid for it or invested in it and the date you acquired it. Then you need the date you sold it and the selling price. You plug these amounts in on the schedule D and transfer any gain or loss to the form 1040. If you had a loss the loss is carried forward in tax years until you use it up. Following is an example.
If you sold two acres of ground for 10,000 dollars on June 1st, 2006, enter that on the Sch D. Say you bought the ground on February 1, 1999, for 6,000 dollars; enter that on the Sch D. You have a gain of 4,000 dollars which you put on the form 1040; doing the rest of the form you have no tax due. However, you should file the completed return to show why you have no tax due. Otherwise the IRS fills out a return for you showing only the gross amount you received; the 10,000 dollars; and taxes you on it. They have no way of knowing your basis in the ground you sold. Do it and you will have no headaches down the road. Good luck.

Answer 2

You will need to report it to the IRS on Schedule D. The numbers on Schedule D will roll forward to Form 1040.