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I bought 12.5 acres 8 years ago for $80,000. Then split the property in 2. I am going sell one for $80,000. How much is the tax will be? and what kind of tax do I have to pay? Thank you

Guest

I have been living in one part of the property for 8 years (not a house but a travel trailer), so I just want to sell the other part.

jenkin7 · Posted: Mon Dec 21, 2009 11:19 pm Post subject:

Hi monny,

You will be required to pay capital gains tax on the profit you make out of the sale transaction. If you bought the land for $80,000 and split it in 2, the purchase price for each of them would be $40,000. Now if you sell one of them for $80,000, you make a profit of $40k and you will have to pay capital gains tax on this amount.

Guest

Thank you jenkin7.

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