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I bought a piece of vacant land which consists of a double lot which was sold to me as one parcel. I am planning on selling one of the lots to offset the build on my home which will be on the other lot. How does this work as far as capital gains? Just for numbers, let's say I bought the entire parcel for $40K and then I sell one of the lots for $40K? Is it considered a wash?
my guess is you would split the cost basis as 20k each if you bought 2 shares of stock for 40 dollars and sold 1 share for 40 . seems to me cost is 20 per share
my guess is you would split the cost basis as 20k each if you bought 2 shares of stock for 40 dollars and sold 1 share for 40 . seems to me cost is 20 per share
I understand what you are saying. So, anything over $20k would be considered capital gains?
my guess is you would split the cost basis as 20k each if you bought 2 shares of stock for 40 dollars and sold 1 share for 40 . seems to me cost is 20 per share
Guess my primary residence credit will come in handy then. I was thinking it was going to be a waste.
Have a place I bought for $330k. Splitting three lots off I'm going to build homes on, selling the original for $370k, and the other completed ones in the $350k range.
Would leave me with a 15.3k capital gains on the original and 82.5k write off on each of the lots + construction costs.
(I just started working with an accountant. Can't keep up on my own anymore.)
Guess my primary residence credit will come in handy then. I was thinking it was going to be a waste.
Have a place I bought for $330k. Splitting three lots off I'm going to build homes on, selling the original for $370k, and the other completed ones in the $350k range.
Would leave me with a 15.3k capital gains on the original and 82.5k write off on each of the lots + construction costs.
(I just started working with an accountant. Can't keep up on my own anymore.)
my guess is you would split the cost basis as 20k each if you bought 2 shares of stock for 40 dollars and sold 1 share for 40 . seems to me cost is 20 per share
Keep in mind, this assumes the property is split into two lots of equal size. If you split the property and the lots end up not being exactly equal, the transfer of your cost basis will likely not be equal as well.
Quote:
Originally Posted by LordSquidworth
Guess my primary residence credit will come in handy then. I was thinking it was going to be a waste.
Have a place I bought for $330k. Splitting three lots off I'm going to build homes on, selling the original for $370k, and the other completed ones in the $350k range.
Would leave me with a 15.3k capital gains on the original and 82.5k write off on each of the lots + construction costs.
(I just started working with an accountant. Can't keep up on my own anymore.)
Yeah . . . that definitely sounds like a gray area that I would consult multiple experts on.
Keep in mind, this assumes the property is split into two lots of equal size. If you split the property and the lots end up not being exactly equal, the transfer of your cost basis will likely not be equal as well.
Yeah . . . that definitely sounds like a gray area that I would consult multiple experts on.
Yeah, going to do so. Still have a long way to go before breaking ground on any. Would love to make usage of the $250,000 primary write-off somehow, but the original home isn't where the money would be made. Value is all in the extra land, which is the last in the neighborhood.
Section 1237 of the tax code refers to capital gains on splitting land. At least it did when I made a note of it a couple years ago.
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