Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:

- quote -

Perhaps you should use La instead of LA - don't want people
to think you're in Los Angeles, after all.

Stu

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bethcdrake[at]yahoo.com wrote:

- quote -

I thought by now you would have received the complete answer
to this.

Seth is right on the money of course. IF the process takes
your entire property, your main home, that is, then yes, not
taxable.

However when they "slice' off a corner it's all taxable
(less the original cost of that portion of the land; see
your original documents to help document that) except the
reimbursement for relocating the septic tank system.

For instance, if you paid 80,000$ for the five acres 15
years ago, and AT THAT TIME the land was worth 8,000$, and
the (our) Bob Riley's minions decide to take one acre and
reimburse you 10,000$ including $3000 for replacing the
septic tank system ( I know; I have one!), the net is
7000$, cost is 8000/5 = 1600$; and gain is ....$ 5,400.
(Did I do the math right?

Here in Lee county I'm just waiting for some of these to pop
up, since our county, particularly this section, is
experience unprecedented growth. 27 years ago when I moved
out here it was country. Today, a different matter.

ChEAr$,
Harlan Lunsford, EA n LA
(and you can probably figure out what the "LA" stands for.)

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Seth Breidbart wrote:
- quote -

Not certain if this would be of any benefit in the immediate
sense, but since the municipality threatened eminent domain,
might as well write that into the agreement of the voluntary
turnover. I'm thinking that, with additional steps, this
might be useful in leading to some other corresponding event
where this gain may qualify for IRC 1033 exclusion -
involuntary conversion treatment. You should at least look
into that.

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<bethcdrake[at]yahoo.com> wrote:

- quote -

It seems to me you are selling part of your property. You
should allocate the cost basis of the entire property
appropriately, and the excess received over the allocated
basis is gain. I don't know if the gain is excludable
because the property is your home.

- quote -

If the amount received excees the entire basis, there's
clearly a gain (adjuting the basis below $0 doesn't make
sense.)

Seth

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We have received an offer by our city/state(Alabama) to
purchase a right-of-way on our 1.15acre property to
facilitate a road expansion project. The basis for the
offer includes purchasing the right-of-way, temporary
easement, 150 sf of our driveway, our septic system (which
will need to be moved) and proximity damages on our home
since the new 5-lane road will be rather close to our home.
The offer states that if we cannot agree on payment, the
state will exercise the right of eminent domain to condemn
our property.

We will be staying in our home. We have a current mortgage
on our home and a nice equity. We built and our home and
have lived here for 8 years. We have roughly 50% equity in
our home today.

We assume the payment will come to us with our mortgage
lender's name listed on the check...but either way we will
be applying 100% of the payment to our mortgage.

Will we owe income taxes on any of this payment? I am hoping
this money will simply be an adjustment to the basis of our
home if we sell in the future, and not require us to pay
taxes.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >