When you sell property, the difference between what you receive and your tax basis in the property produces gain or loss. When selling property, include what you paid for this, such as the land and the cost of constructing the home as well as the initial closing costs (e.g., attorney’s fees, etc.).
Forced disposition of property due to condemnation, theft, or casualty. Tax on gain from involuntary conversions may be deferred if replacement property is purchased.