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Angie, Tax Preparer
Category: Tax
Satisfied Customers: 226
Experience:  Bookkeeping, Profit and Loss, Balance SheetsAll types of US Taxes, Tennessee taxes, Personal, business, payroll, sales tax etc.
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Is the money received from the State of Alabama purchase of

Customer Question

Is the money received from the State of Alabama for the purchase of my land for right of way taxable?
Submitted: 1 year ago.
Category: Tax
Expert:  Angie replied 1 year ago.

Yes, it is will receive a tax form at the end of the year. However, it is only taxable to the extent you had a gain on the sale of the property. For example. If you purchased the land at $2000 per acre 10 years ago and sold it at $3000 per acre for the right of way, you will owe capital gains tax on only $1000 per acre. I realize when the state purchases right of way it may not be by the acre, however you will need to figure out your basis in the amount of land the state purchased.