No 1 is Yes. No 2, 3, 4 are NO.

Nan, EA in LA

<< ================================================== ===== > << 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. > << ================================================== ===== >

<delaluz3[at]mindspring.com> wrote

- quote -

Yes.

- quote -

No. But you would increase your cost basis in the house.

- quote -

No. There isn't anything you can do to reduce or avoid the
gain.

- quote -

Sell some capital investment (stocks, etc) for a whopping
loss. But that's not the wisest thing to do, unless you
have something to sell, and want to sell it.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

<< ================================================== ===== > << 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. > << ================================================== ===== >

delaluz3[at]mindspring.com wrote:

- quote -

Yes, LTCG at maximum of 15%

- quote -

Using the funds to make capital improvements to your
residence would add to your "cost basis", and may (or may
not) reduce your tax when you sell. WHAT you do with the
funds from the land sale has nothing to do with your capital
gains or tax on that sale.

- quote -

Your mortgage balances have NOTHING to do with your taxes,
cost basis, or capital gain on sale.

- quote -

Once you have made the sale, it is a little late to do any
tax planning. If you have not yet made the sale, consider
selling the entire property (residence and land) and getting
the benefit of EXCLUDING up to $500,000 of gain (if MFJ,
$250,000 if single).

<< ================================================== ===== > << 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. > << ================================================== ===== >

I bought my current residence in 1995, a house with 4 acres.
If I were to sell one of those acres what is the tax
liability? Assume that in 1995 the total price of the house
was 200K, the house was valued at 120K and the property 80K
(20K per acre).

1. If I sell one acre for $50K the net profit is 30K. Would
I have to pay capital gains on this?

2. If I used some of the 50K from the sale to improve my
residence property new siding, insulation, pave driveway,
etc. would that reduce the net profit subject to capital
gains?

3. If I used some of the 50K to pay down the first mortgage
would that reduce the net profit subject to capital gains?

4. If I used some of the 50K to pay down the a second
mortgage (credit line on home) would that reduce the net
profit subject to capital gains?

Any other ways to reduce the capital gain exposure?

Thanks

<< ================================================== ===== > << 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. > << ================================================== ===== >