Posted on: 21st Dec, 2009 10:36 am
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
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.
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.
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.
Thank you jenkin7.