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Jonathan W
Lv 4
Jonathan W asked in Business & FinanceTaxesOther - Taxes · 8 years ago

How to report sale of divided land on taxes?

I purchased 75 acres of land for $65,000 3 years ago. I sold 38 acres of that this year for $63,000. I walked away from closing with about $3k after paying off what I owed on the land. How in the world do I report this on my taxes?

1 Answer

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  • Wayne Z
    Lv 7
    8 years ago
    Favorite Answer

    What you owed on the property is irrelevant.

    $65,000 * 38/75 = $32,933

    $63,000 - $32,933 (less expenses of the sale) = Taxable Gain

    Bad News: Your tax bill will be more than the $3000 that you walked away with.

    Good News: You know own the remaining 37 acres free and clear.

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