Have a Tax Question? Ask a Tax Expert
Can you tell me when you first purchased the land and what the original purchase price was? This will help me better determine what you will owe in taxes. Thanks.
You are going to owe tax on your gain only, which is $11,500. You will be taxed at the long term capital gains rate, which is currently capped at 15%, so the federal taxes due as a result of this sale will be $1,725.00.
In general, no estimated tax payments are required if your withholding and credits add up to at least as much as your prior year's tax. In other words, if you are currently employed and having taxes withheld from your check, and if the total taxes withheld will be at least the same as what your last year's taxes were, then you do not need to pay any taxes at this time as a result of selling the land.
If, on the other hand, you do not think you will meet that requirement, then you should submit estimated payments to the IRS on Form 1040ES. These estimates are filed quarterly. The first quarterly installment has already passed for this year, so you would just simply file for the remaining 3 quarterly payments.
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Thanks for the question.... by the way here is a link to the Form 1040ES if your need it
By the way, I forgot to mention that the same rules would apply for your state taxes as far as making estimated payments. Let me know if you need me to send you a link for the state forms as well, and for which state.
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