Capital gains tax on vacant land

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.

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.

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

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?

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.

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.

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

Selling .14 acre of vacant land. Do not own any other property. Have this parcel since 2002. Will I have a capital gain tax? How much?

Hi Lupe,

Welcome to the forums.

Usually when a person sells property, he has to pay capital gains tax on the gain incurred through the sale. There is an exemption available in this case but it will depend on certain conditions.

The capital gains tax is not indexed to inflation. The tax rate keep changing depending upon the following factors:

• The type of your asset
  
• Your cost basis (the purchase price of the asset)
  
• Your income
  
• The length of time you held the asset prior to the sale

.You may also refer to the discussions on Capital gains tax and Exemption from capital gains tax for more information on this issue.

I shall also suggest that you consult a tax advisor regarding how much you have to pay for capital gains tax.

Thanks,

Sara

selling land, purchased 1937, I am 93, how much capital gains will I pay?

Hi Albert,

The amount of the capital gains tax that you may need to pay depends on the sale value of your property. If you make more profit on selling the property, then you may have to pay a greater amount of tax provided you do not qualify for the capital gains exemption limit.

HELLO, I WANT TO SELL TWO LOTS TOGETHER ,ONE I HAVE HAD FOR FIVE YEARS (PAID 23K) AND ONE FOR ONE YEAR(PAID 8K).I EXPECT TO GET AROUND 95K MINUS 7 % REALTOR FEE.MY WIFE AND I FILE JOINTLY ON ABOUT 90K INCOME. WHAT RATE OF CAPITAL GAINS TAX CAN I EXPECT? THANKS, DENNIS

Welcome Dennis.

The capital gains taxes are calculated on federal as well as state level. However, not all states have separate capital gains tax rates. Rather the capital gains are treated as ordinary income and as such subject to the state income taxes. Also the tax rate varies with the income tax bracket under which you come in.

I think it's better if you can consult an accountant or a tax preparer.

Thanks.

My husband and I bought 38.5 acres of vacant land 8 years ago for 45k. This land was used for hunting. We just sold it for 80k in 2007. One month later we bought 40 acres of vacant land for 80k. This will also be used for hunting. Will we have to pay capital gains taxes on this?

Hi Rhonda,

Welcome to the forums.

You'll ahve to pay capital gains tax on the land sold off for $80K provided you don't qualify for capital gains tax exemption . But you need not pay tax on the land bought.

Take Care