makbo[at]pacbell.net (Mark=A0Bole) posted:
- quote -

You're right to call me on that, Mark. I entered the wrong
line from the Tax Rate Schedule. However, your numbers are
a little off -- maybe from 2004. Corrrect 5% limit is
<$29,700 Single or <$59,400 MFJ.

Bill

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Bill wrote:
- quote -

Is this correct? I think the tax bracket for 5% capital
gains rate is $29,050 single and $58,100 MFJ (15% tax
bracket).

-Mark Bole

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"chaz" <chaznsc[at]yahoo.com> wrote:

- quote -

Yes, you would owe capital gains tax on the land sold. The
amount depends on your tax bracket which depends on your
adjust gross income. It will range between 5-15% of the gain
(your sale price minus cost and any improvements paid for on
the land).

Assuming you have lived in the house 2 of the last 5 years,
if the gain is large, you should discuss strategy with a tax
professional to see if selling the entire house and land (if
thats an option) qualifies as sale of a residence which is
exempt from any capital gains tax if you havn't used that
exemption in the last 2 years.

Mike Lewis, CPA

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chaznsc[at]yahoo.com (chaz) posted:

- quote -

If you sell your Main Home -- which would mean the entire
holding -- after living there for at least 2 years, you
would qualify for favorable treatment, in that you could
retain up to $250,000 ($500,000 MFJ) profit from the sale,
tax free.

If you sell a portion of the land, it's a straight land sale
of an asset, and capital gains tax would be due on the
proceeds less "cost basis" (which you would have to
calculate, perhaps with the aid of an appraiser).

The tax you would pay would be either 5% or 15% of the gain,
depending on your tax bracket. [The 5% limit is <$7300
Single or <$14,600 MFJ.]

Bill

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If this is not the correct forum for this question, please
point me in the proper direction.

I live on 11 acres of land. I am considering selling my
place and moving back to town. If I only sell off say 5
acres and rent the portion the home is on am I subject to a
capital gains tax? (I assume so) Is there any way to quickly
estimate the tax I might face?

Thanks in advance

chaz

<< ================================================== ===== > << 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 (2006) - All rights reserved. > << ================================================== ===== >