Berto wrote:

- quote -

No. The final regulations on the sale of a residence would
allow the gain on that piece of land to be excluded, but
*ONLY* if you sell the residence within two years of the
date of sale of the land. And the regulation specifically
says you *report* the gain and then file for a refund later
if the residence isn't sold by the due date of the return
where the sale of the land would have to be reported.

--
Ed Zollars, CPA
Phoenix, Arizona

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"Berto" <kid_pulpo[at]yahoo.com> wrote

- quote -

You would have to allocate part of your purchase price to
the house, and part to the land. then break up the land
cost to a per acre cost basis. That's the number to
determine the gain on the sale.

Example: House basis = $159,000, Land basis = $21,000
($6,000 per acre). If you sold two acres for $50,000 then
your gain would be $38,000. It's a capital gain, taxed at
15%.

- quote -

Not under a normal sale circumstances. Under a condemed
sale (where some property is taken by the state to widen the
highway for example) there are some things to do to avoid
the gains. If you sold the remaining property and house
withing a year, then it may be considered part of the sale
of the house transaction and fall under the house sale
rules.

--
Paul A. Thomas, CPA
taxman at negia.net

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I'm trying to figure the tax impact of selling a piece of
land. I bought a 2200 sq foot house 6 years ago on 3 1/2
acres for $180,000. I've lived there since then. This
property wasn't used for any business. I would like to sell
two of these acres (and still live in the house).

Assume I sell the 2 acres for $50,000. What would be the
impact on my federal income tax? Is there any way to put off
any tax impact until I sell the house on the remaining 1 1/2
acres? I'm not planning on doing this but I would love to
postpone any tax impact.

Thanks!

Bob Andersen

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