Posted on: 03rd Jun, 2009 11:50 pm
I am considering buying 45 acres with a house, barn, pasture, etc. The neighbor is interested in buying some of the land as well. The seller has offered to either sell us the whole thing and then we can sell the land if we want, or sell off part of the land before (to reduce our purchase price).
So, I was wondering, if we purchased the whole thing, then turned around and sold off part - like 10 acres to the neighbor for the same price that we purchased those 10 acres, do we have to pay a capital gains tax on that? We would initially have to take out a loan either way, but once we sold the land we would apply it directly to the loan.
Any advice would be appreciated.
:?
So, I was wondering, if we purchased the whole thing, then turned around and sold off part - like 10 acres to the neighbor for the same price that we purchased those 10 acres, do we have to pay a capital gains tax on that? We would initially have to take out a loan either way, but once we sold the land we would apply it directly to the loan.
Any advice would be appreciated.
:?
Hi marioncreek
You will be charged capital gains tax only if you make a profit when you sell the property. If there is no profit, then you won't be charged with capital gains tax.
Thanks.
You will be charged capital gains tax only if you make a profit when you sell the property. If there is no profit, then you won't be charged with capital gains tax.
Thanks.
marioncreek
Welcoem to the forum.
Niics is correct you only pay tax when you make profit. Probably its good idea for you to let the seller sell the 10 acers first are alogn with your purchase to keep the transctions simple and low monhtly payment with yoru loan.
Good luck and feel free to ask.
Welcoem to the forum.
Niics is correct you only pay tax when you make profit. Probably its good idea for you to let the seller sell the 10 acers first are alogn with your purchase to keep the transctions simple and low monhtly payment with yoru loan.
Good luck and feel free to ask.