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Old 08-13-2005, 01:41 PM
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Capitol gains tax on land sale.

What is the name of your state?Arizona.

In June of this year we bought a home on 4 1/2 acres. We plan to split off 2
acres and sell it. If we put half of the money from the sale against our mortgage will we have to pay capitol gains on it? How would the remaining money be taxed?
  #2  
Old 08-13-2005, 02:24 PM
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Join Date: Aug 2005
Location: St. Odo of Cluny Parish
Posts: 29,043
I am NOT a tax attorney, but I do know that if you sell your land (or part of it) then you have to pay capital gains tax.

See a tax professional to find out if there is a way to lessen the bite from Uncle Sam.
  #3  
Old 08-13-2005, 03:04 PM
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Join Date: Aug 2003
Posts: 1,848
The only way to avoid capital gains on such a sale would be if you either sold the house WITH it, or invested the proceeds in similar investment property.

A sale such as you describe is subject to capital gains tax on the full amount of the "gain". It makes no difference whether you have a mortgage or not, and also makes no difference if you used half the proceeds to pay said mortgage.

Sorry.

Snipes
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