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Capital gains tax on vacant land

I bought a house of 2 acre for 300$. I divided off 1 acre. So if I sell the land and house I can avoid capital gains. The house is currently worth 500$ and the vacant land is worth 300$. If I can sell the land only, I will have to pay capital gains on it. How do I figure out as to how much I will get taxed on? what is the tax rate of capital gains?

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I bought a piece of land in 2009 with the intent to build a house. We have decided not to build. I am still financing it. If I sell will I need to pay capital gains at 15%

Like | Dislike | Share | Posted: Tue, 08/16/2011 - 10:48 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Julia,

If your mother's name is mentioned on the property deed, then she will be considered as one of the owners of the property. Thus, the niece will not be able to claim the whole property as her own.

Thanks

Like | Dislike | Share | Posted: Tue, 08/17/2010 - 22:47

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Zilpah,

I'm not sure about the 5 year rule. But if you owned the land for more than 1 year, your gain will be subject to more favorable Long Term Capital Gains Tax rates. I will suggest you to contact a tax adviser or a CPA in this regard and take his opinion.

Thanks

Like | Dislike | Share | Posted: Mon, 06/06/2011 - 23:01

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

As you will be re-investing the money once you sell off the property, you may be able to offset the capital gains. But, your best option will be to contact a CPA and take his suggestions.

Like | Dislike | Share | Posted: Tue, 03/15/2011 - 22:13

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I bought 10 acre 10 years ago for $50,000. built a barn and driveway for $40,000 when I refinanced. I deducted the morgage interest on income taxes. If I sell will I have to pay taxes on profit? what if I use money to buy a primary residence or rental property?

Like | Dislike | Share | Posted: Sun, 10/03/2010 - 09:24 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I bought a home in 2005. I lost the house in a hurricane and paid off the mortgage $177,000 and I did not rebuild and its a vacant lot.

Now its 2011, I am about to sale my vacant lot for $55,000. Do I have to pay any capital gains tax? Technically its a loss on my part.

Like | Dislike | Share | Posted: Mon, 01/24/2011 - 20:08

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guinness,

As you're the owner of the property, if you sell it off and receive a profit, you'll have to pay capital gains tax for the same. If the property was used as a primary residence, then you'll be able to lower the tax payments to some extent.

Like | Dislike | Share | Posted: Sun, 10/03/2010 - 21:44

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Selling land in Montana- paid 26,000.asking 65,000. we want to take the profits and buy a condo in Florida- will we still pay capital gains on this land .

Like | Dislike | Share | Posted: Wed, 11/24/2010 - 07:05 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome solrak,

If you receive a profit by selling off the vacant lot, then you will be liable for paying the capital gains taxes. If you won't earn any profit from it, then you won't have to pay any taxes.

Like | Dislike | Share | Posted: Tue, 01/25/2011 - 20:13

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My husband purchased a recreational lot in 1972 and is now selling this lot for $159,000. Is there any way to avoid paying CGT?

Like | Dislike | Share | Posted: Thu, 04/14/2011 - 15:47 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi MC,

So far I understand there will be gift tax to be paid by you on selling the property.

A real estate attorney can help you more efficiently on the tax related matters attached to the land sale.

James

Like | Dislike | Share | Posted: Wed, 07/12/2006 - 10:30

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Dad inherited 60 acres 20 years ago. Has now deeded it undivided to myself and brother and Sis. Selling is now being considered. What is the basis for the tax? We will obviously be selling for more than the land was purchased for many years ago, and more than it was worth when dad inherited. He deeded it to us just under 2 years ago.

Like | Dislike | Share | Posted: Wed, 07/12/2006 - 08:51 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i have a piece of land that i have over $2,000 in taxes on for several years can I figure this expense into my cost basis as I have never took this expense off a tax return

Like | Dislike | Share | Posted: Wed, 10/27/2010 - 14:44 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi nirmal,

Your query has been replied to in the given page:
http://www.mortgagefit.com/budgeting-finance/about48693.html

Take a look at it. Hope it helps you.

Sussane

Like | Dislike | Share | Posted: Sun, 01/23/2011 - 21:52

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi IJ,

Your query has been replied to in the given page:
http://www.mortgagefit.com/budgeting-finance/about45534.html#188171

Take a look at it. Hope it helps you.

Like | Dislike | Share | Posted: Thu, 10/21/2010 - 22:02

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi

My dad passed away i got some land i sold it now i am on disabilty and have been for a few years i make less than 700.00 month do i pay taxes on what i sold the land for.

Like | Dislike | Share | Posted: Wed, 11/24/2010 - 12:08 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am planning to sell a vacant that my father gave to me over 50 years ago. According to the City of Virginia Beach the land is worth a little over $100,000. Do I have to pay capital gain on the amount I sell the property for which is approximately $65,000?

Like | Dislike | Share | Posted: Fri, 10/08/2010 - 07:58 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Get in touch with a tax adviser and he would be able to guide you in a better way in this matter.

Like | Dislike | Share | Posted: Tue, 07/27/2010 - 22:32

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I bought a parcel of land in the desert in 1990 for $15,000. I made no improvements to the land. The government is interested in purchasing the land for $100,000. How can I avoid/minimize capital gains on the sale? Would purchasing an investment property after the sale be an option?

Like | Dislike | Share | Posted: Sun, 07/10/2011 - 23:14 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Bonnie,

If you invest the money in purchasing a real estate, then you may not have to pay capital gains taxes.

To Al,

If you sold off the land for a profit, then you will be liable for paying capital gains tax.

Like | Dislike | Share | Posted: Wed, 11/24/2010 - 21:12

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Bonnie!

Welcome to forums!

If you make profit from the sale of the property, then you will be liable for paying capital gains taxes. However, if you flip your existing home for some other home or swap ownership, then you may be able to avoid capital gains taxes.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Thu, 04/14/2011 - 21:43

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

You should contact a tax adviser and take his opinion in this matter. He will guide you in this regard.

Like | Dislike | Share | Posted: Wed, 10/27/2010 - 23:15

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

What are the tax consequences as compared to inheriting it at her death?

Like | Dislike | Share | Posted: Sun, 02/06/2011 - 10:25 | Post subject:

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Melinda,

The maximum long term capital gains tax rate is 15%. But if you sell the vacant land, then you are actually adding a large amount to your other income. So, you may have to pay taxes in a much higher bracket. This may also cause your deductions/exemptions/tax credits to be limited.

You may also have to pay Alternative Minimum Tax. So your tax liability may be more than 15% on the gain itself.

Thanks,
Caron.

Like | Dislike | Share | Posted: Thu, 02/09/2006 - 20:23 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

we purchased 115 acres +/-,we have owned for 26 yrs. we are closing on the sale of this land,we gave 15,000.00 and now selling it for 132,500.00, we were married at the time of purchase we are now duvorced, she has no taxable income and i had 9,000.00 taxable income in 2010.she is 64,Iam 75. are there any type of exemptions for low income,and what tax bracket may we be in,she is to get half and i get half.thank you.

Like | Dislike | Share | Posted: Mon, 05/09/2011 - 11:10 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

if I sell a land of 1984 [got from father's propety--if he purchased on 1940and divided on
1984] if sell as per valuation---in 38 thousand -how much tax to be paid

Like | Dislike | Share | Posted: Sat, 01/22/2011 - 21:42 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jeff!

Welcome to forums!

You can go ahead and purchase an investment property after the sale of the land. This might help you in lowering your capital gains taxes. You can also contact a tax adviser and take his opinion in this matter.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Mon, 07/11/2011 - 21:49

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

will have 100% cap gains on 9.5 ac in CA if I sell for 75K...also self emp as Avon Lady and get Soc Sec (age 72). But don't make over 15K a year, so do I still have to file taxes + Cap gains? At my age, I can make 30K/year and not file...thanks

Like | Dislike | Share | Posted: Tue, 07/27/2010 - 13:47 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Eugene,

As you're the owner of the property, you'll be liable for paying the capital gains taxes if you receive a profit from the sale of the property.

Like | Dislike | Share | Posted: Fri, 10/08/2010 - 22:57

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My father (who is in his late 60's) owned property in Costa Rica. He owned the land and a home on the land. However, the home was demolished 3 yrs ago b/c the home was vacant and looters had set up living quarters there. He sold the land through a POA this past month and told me he wants the money of the sale divided amongst his 3 children. The money is sitting in a bank account in C.R. What is my responsibility in terms of taxes? Is this considered a gift? Do I have to report to IRS and pay state and federal taxes? Does he have to report the income as his, since he technically will not received it? He says he does not want to be involved in anything that has to do with us getting the money. He is a cranky old man and it is hard to communicate w/him. He told me to contact the POA in C.R and I have. There is $39,000 after expenses to be divided. Any input is appreciated. Thank you

Like | Dislike | Share | Posted: Thu, 10/21/2010 - 03:33 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

On vacant land, the tax will be more as you are adding considerable amount to your income.

Normal rate is 15% but you need to know the exact prevailing rate on vacant land.

Like | Dislike | Share | Posted: Sun, 02/26/2006 - 07:35 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am selling one and a quarter acre of vacant land that I.ve owned since 1966. I am 67 years old. What would be my tax costs?

Like | Dislike | Share | Posted: Sun, 02/26/2006 - 07:11 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We bought a vacant lot in 2001 used it for storage in our business until 2004 sold it in 2005 then bought vacant land that is timber and hay, and put a mobile home on it for main house. What form would I use? tax year 2005

Like | Dislike | Share | Posted: Mon, 04/09/2012 - 14:30 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I don't think you will be able to get exemptions for low income.

Like | Dislike | Share | Posted: Tue, 05/10/2011 - 02:26

Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

If you gain profit from the sale of the property, then you will be liable for paying the capital gains taxes depending upon the amount of profit you earn from the sale.

Like | Dislike | Share | Posted: Mon, 09/19/2011 - 00:57

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My husband and I bought of piece of property 8 years ago. We are in the 15% tax bracket now and expect to make a profit of $30,000.00. How much capital gains should we plan on paying?

Like | Dislike | Share | Posted: Tue, 11/08/2011 - 04:34 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I had 28 acres that I sold for $45000 in 2008 which I financed with $2000 down and next payment in 2009 was $2000 on principal and 6% on balance, the same for 2010. In Feb of 2011 buyer paid the balance of $38,800. Being retired and on Social Security with only other small sources of income but up until this year after the land payoff in 2011, I have not been subject to income taxes since retirement and have not had to file. I received the land from my father in 1989 as a gift/inheritance, except my father did not pass away untill 1997. The value of the land at time of taking possession was approximately one half the sale price but I have mixed opinions whether I can count the cost basis even from IRS tax people since it was a gift. The value of the land when my father obtained was probably near $100 an acre. Do I have an expert who actually knows the answer?

Like | Dislike | Share | Posted: Wed, 01/25/2012 - 15:13 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

we were sold 38.9 acres for $1.00 by my fater-in law about 20 yrs ago. we have been renting the land. we pay taxes on the rental income. now we want to
sell the property but what would be the captial gains tax?

Like | Dislike | Share | Posted: Sun, 09/18/2011 - 09:27 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Rosemary,

You will probably be in the 15% capital gain tax bracket. For details on any kind of relief availability you should contact a good tax accountant in your locality.

He will also help you in calculating the total tax to be paid based on your purchase cost.

James

Like | Dislike | Share | Posted: Tue, 02/21/2006 - 16:35

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Live in arizona and selling land vacant(timber on it) in Louisiana have had land for over 45 years. Have 44 acres. what % of tax would I pay on this. We are boyh 66.

Like | Dislike | Share | Posted: Tue, 02/21/2006 - 15:54 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

hi, I am considering selling some vacant land i have owned for over 15 years for a good profit. there is some land next to my residence for sale. if i sell the land and buy the other land do i not have to pay capital gains on the profit.
thanks

Like | Dislike | Share | Posted: Tue, 03/15/2011 - 16:03 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

You will have to pay capital gains tax depending upon the amount of profit you gain from the sale of the property. You need to contact a tax adviser and he will let you know how much tax you need to pay.

Thanks

Like | Dislike | Share | Posted: Wed, 11/09/2011 - 20:39

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Pat!

Welcome to forums!

If the parent transfers the property to the child as a gift, then the parent will be liable for paying gift taxes.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Mon, 02/07/2011 - 21:20

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Did you incur any profit when you sold off the property? If yes, then you will be liable for paying the capital gains taxes.

Like | Dislike | Share | Posted: Thu, 01/26/2012 - 00:22

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My mother in law inherited land in Lousianna with her sister.Her sister has died and her niece has said the land is now in her name.Does my mother in law have any recourse, since she never signed away her 50% of the land?

Like | Dislike | Share | Posted: Tue, 08/17/2010 - 09:12 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We have 7 acres worth $150,000 that we've owned since 1992. The purchase price was $40,000. We were told that if vacant land was owned over 5 years that capital gains was not due. Is this true? If not what percent will we have to pay? Thank you for your help.

Like | Dislike | Share | Posted: Mon, 06/06/2011 - 19:00 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Michael,

If you sell off the land and receive a profit from the sale of the property, then you will be liable for paying the capital gains tax.

Like | Dislike | Share | Posted: Tue, 08/16/2011 - 21:37

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Deanna!

Welcome to forums!

In order to know the right type of form which you need to fill out for this sale and purchase, you should contact a tax professional. He/she will guide you better in this regard.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Tue, 04/10/2012 - 00:16 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We are thinking of sellling 97 acres of farm land. My husband and I file jointly. What amount of capital gain taxes are we looking to be charged?

Like | Dislike | Share | Posted: Sun, 05/06/2012 - 12:13 | Post subject:

jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Connie,

The capital gains tax will depend upon the amount of profit you receive from the sale of the property.

Thanks,

Jerry

Like | Dislike | Share | Posted: Mon, 05/07/2012 - 03:11 | Post subject:

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