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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2995
Experience:  IRS licensed Enrolled Agent and tax instructor
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I just solid a piece of bare property in California that I

Customer Question

I just solid a piece of bare property in California that I inherited from my dad in 1991. How do I find out what I owe for capital gains? Or if I owe capital gains? I live in Washington state.
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

Hi. My name is ***** ***** I will be happy to help you.

Calculating capital gains is a multi-step process. First you need to determine your basis. If you received the property after your father passed away as beneficiary, your basis will be fair market value of the land you inherited it plus any improvements.

Once you determined your basis, you will reduce the sales proceeds by the basis and expenses of sale to calculate your capital gains.

sale proceeds - basis - selling expenses = capital gains.

Next you will have to include the capital gains to your other income to determine your tax bracket.

In 10 - 15% tax bracket your capital gains is 0

In 20 - 35% tax bracket your capital gains rate is 15%

and in the highest 39.6% tax bracket your capital gains rate will be 20%.

Because the property is located in CA, you will have to file CA state tax return if you have any capital gains.

Expert:  emc011075 replied 1 year ago.

I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. You find the rating bar on the top of the page – 5 stars. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.