| When vacant land is sold, the sale must be filed with | | | | short-term debt, meaning that you owned the land for |
| the Internal Revenue Service. You must report the | | | | one year or less. Use line 8 if it's long-term, or you |
| sale on your personal federal tax return if it meets | | | | owned the land for more than one year. |
| certain criteria. These include whether the land is | | | | Step 3 |
| adjacent to your primary residence, if you owned or | | | | Report the loss, if that's the case, on Schedule D, lines |
| used the land as part of your primary residence and | | | | 1 or 8. The loss is not tax-deductible, but you still have |
| whether the sale of your primary residence and the | | | | to report it. |
| vacant land occurs within two years of each other. | | | | Step 4 |
| Step 1 | | | | Fill in the information associated with Lines 1 or 8 in |
| Calculate the profit or loss by subtracting the selling | | | | sublines a through e. Enter the amount of your gain or |
| expenses from the selling price and any outstanding | | | | 0 (zero) on subline f, if it's a loss. File the form along |
| mortgage balances or tax liens paid out of the | | | | with your personal income tax return. |
| proceeds of the sale. Determine whether it's a profit or | | | | Tip |
| loss and the exact amount. | | | | If the vacant land was used for business purposes or |
| Step 2 | | | | rented for income, you may be required to file IRS |
| Report the gain, if there was one, on Schedule D of | | | | Form 4797 to report the sale of the vacant land. |
| the 1040 federal return form. Use line 1 if it's a | | | | |