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Stephen G.
Stephen G., Financial Advisor
Category: Capital Gains and Losses
Satisfied Customers: 6478
Experience:  Senior Tax Expert; CPA/PFS(retired)Personal Financial Planner; Small Business & Professional Mergers & Acquisitions
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3 years ago I took a parcel of land as partial trade in the

Customer Question

3 years ago I took a parcel of land as partial trade in the sale of my home. The sales contract actually lists the land as a trade and valued at $40,000. My receipt for the transfer is for only $10.
When I sell this land, is my cost $40,000 or $10 for capital gains purposes?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Stephen G. replied 1 year ago.
Hello, my name is***** & I'll be helping you today. My goal is to give you a complete & accurate answer that you can understand.
The fair market value of the land you accepted in "trade" should have been part of any required reporting for the sale of your home. If the fair market value of the land was $40,000. and there was no artificial manipulation of the selling price, then your tax basis of the land is $40,000.
Unfortunately, to be consistent and validate the value, and confirm that this was an arms length transaction between buyer & seller, it would have been better to have the deed and transfer reflect the $40,000., rather than save some money on the transfer stamps. The $10. is the kind of transfer that could have been made between family.
If you sold the home to a related party, then my answer would be different.

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