How to handle non-income vacant land held for investment?

How can non-income-producing vacant land, which is held for investment, be handled in ESPlanner? If I include it as 'Real Estate', I get an incorrect capital gain upon sale since the land is not depreciable and there are no improvements.

Comments

Since there's no income from owning the land, just enter a special receipt when you sell it.

The problem is with the income tax. If I enter a Special Receipt for the sale, won't the entire amount be considered as income for the tax calculation (regardless of the amount of gain above the basis)?

Only if you designate it as taxable at ordinary rates.

Sorry, I'm still confused. I'm hoping that the program has a way of (1) calculating the gain on the sale and (2) taxing it at the capital gain rate. I understand that this is done by the program for properties listed under Real Estate - but I also think I understand that properties listed under Real Estate are depreciated by the program (which is not appropriate for unimproved land) resulting in an incorrect gain. If I show the sales proceeds as a Special Receipt, is there any way for the program to consider the basis of the property so that it will know that the full amount of sales proceeds doesn't represent the gain on the sale (and then also to apply the capital gain rate for the tax calculation)?

Couldn't you just enter the cost basis as a non-taxable special receipt, and the gain on sale as a special receipt taxable at capital gains rates?

That should work to give me the correct income tax.

I list my vacant land as a vacation home and it seems to work correctly