Posted on: 08th Mar, 2010 11:46 am
would I have to pay capitol gains if I sold my 2 acres and reinvest the money in to a new home? and if not is there a time period in which I have to do so?
Hi adrian,
If you sell the vacant land and earn a profit, you will have to pay capital gains tax. However, you do not have to pay any taxes if the amount of your profit from the sale of the property does not exceed $250,000 (or $500,000 if you're married). But the property must have been used as your primary residence for you to claim this exemption. Since it is a vacant land that you are selling, you are unlikely to qualify for the exemption and hence, you will have to pay capital gains tax on the profit you make by selling the land.
If you sell the vacant land and earn a profit, you will have to pay capital gains tax. However, you do not have to pay any taxes if the amount of your profit from the sale of the property does not exceed $250,000 (or $500,000 if you're married). But the property must have been used as your primary residence for you to claim this exemption. Since it is a vacant land that you are selling, you are unlikely to qualify for the exemption and hence, you will have to pay capital gains tax on the profit you make by selling the land.