Land subdivision and 1098-S

[Rich Ferradino]

I purchased land and subdivided the land into separate lots with individual addresses. I have 7 1099-S, one from each transaction. My question is can I combine all the income and expenses and have file it as 1 1099-S, or do I have to list each individual one. I bought the property for 120k and each was sold for about $30k and not sure if I should divide the original purchase price and subdivision cost by 7, or just lump it all into 1. Thanks!

[Michael Plaks]

@Rich Ferradino

The starting issue is whether your deal qualifies as capital investment or as a development business. It changes taxation very significantly. And it could be either situation, depending on details which should be discussed with your tax accountant. There's a lot of gray here.

If it's capital gains - then you report each sale separately. If it's a business - then you combine all numbers, as long as all sales happened in the same year.