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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I have a property that was bought 10 years ago for $200k, where

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I have a property that was bought 10 years ago for $200k, where I built my primary residence and where I still reside. I was offered 400k for half the property (not my home) for a developer to build a road to their new subdivision. I am a nurses aid of the local rural school district and earn about 15k a year. I also have alimony of this year and next only of 2k a month. What would my capital gains rate be? 10% 15% 0% fpr this yerar 2008 and the long term property? I want to know as if it too high I need to so a 1031 asap as we could close nect week. Thanks
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.

Hello maggie,


When you bought this property, was $200,000 just what you paid for the land only?



Customer: replied 8 years ago.
Yes the 200k was just the land
Expert:  Merlo replied 8 years ago.

Hello maggie,


Basically your gain here is going to be $300,000. That is taking the selling price of $400,000 less your cost of $100,000 (half the land's original cost). Your gain would be classified as a long term capital gain and that tax rate is currently capped at 15%.


Sometimes if you are in a low enough tax bracket the some of the gain can actually be tax free, but your income level just about brings you to the point where that is not something that would apply. So basically you are looking at a federal tax bill of $45,000 on the sale.


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Thank you.


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