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Report with the cost equal to the proceeds on 1099-S.... keep information so when/if client sells property they adjust basis by the cost applied towards the proceeds
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Thank you so much. They also received a 1099misc for “rents” which was for compensation while the project was being completed. How do I handle that portion?
You're welcome. I'd report the 1099-MISC on Schedule E
Shouldn’t that also be offset and the basis be lowered?
Not how I would handle. I would report as rent income just like the 1099 indicates it was
Surface damages don't reduce basis, no.