Capital gains on selling part of home property

[lt5871]

State of Indiana.

In 2004, I sold a small piece of my current home property to a developer for $4,600.00. I did not sell my house and all my property. Can I still use the new capital gains rules for selling of a home. Seems to me I can, even though I did not sell everything.

To complicate things, I was required to sell an easement to a government body in 2005 for $13,000.00. Again, this was a piece of my home property.

I have owned and lived on all this property for more than 2 years.

Seems to me that I should not have to pay tax on either of these items. Had I sold it all, I would not have owed tax. But, I am not sure and I am not sure how to file.

Any thoughts on this will be appreciated.

 

[abezon]

You have to assign a basis to the land sold. For the condemned property, you have the option of assigning it a basis equal to the $13,000 you received. You can figure the basis on the $4600 land in any reasonable way. Any basis assigned to the severed parcels must be deducted from your house basis so you can determine if you have any taxable income when you sell the house.