Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

If I buy a 6 years ago and construct a house now and sell it

Customer Question
under 1031 exchange? should I...
If I buy a 6 years ago and construct a house now and sell it under 1031 exchange? should I buy land and re build again or buying a land would be sufficient enough? For example if I bought a land for 960000 and spent around 400000 to build a home, and sell it for 800000 on the existing property.
1) How much should I spend on the next property under 1031 exchange to avoid tax implications?
2) How can I report it as 1031 exchange?
3)In the above scenario, which are all the properties can we buy as 1031 exchange?
Submitted: 1 year ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 1 minute by:
8/5/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,328
Experience: Certified Public Accountant
Verified

Hi, my name is Mark. I will be happy to help you with your questions.

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Was the land purchased for $96,000? Is the $960,000 a typo?

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

It looks like you have about a $300,000 gain that you may be able to defer with a 1031 exchange.

Ask Your Own Tax Question
Customer reply replied 1 year ago
It must be typo purchased the land for 96000
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

A 1031 Exchange is reported on Form 8824. Here is a link to a useful spreadsheet that will help you with your potential deferred gain.

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

https://www.efirstbank1031.com/documents/Form8824Worksheet.xls

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Have you executed any 1031 exchanges in the past. There are specific steps that need to be taken for a 1031 exchange.

Ask Your Own Tax Question
Customer reply replied 1 year ago
HI MarkFirst thing does this sale qualify for 1031 exchange? as I bought the land in 2010 for 96000 and spent around 400000 to build in 2016 and selling it in the same year? If it does not come under 1031 exchange, how can I report the taxes? Does it not come under long term capital gain? as I bough the land in 2010 and selling it now with imporvements?
Customer reply replied 1 year ago
What tax form should I use it while filing the taxes? Schedule D?
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

If you built the home in 2016. The home would be treated as a Short Term Capital Gain. For simplicity sake assume that the total gain of $300,000. 80% of the sale would be allocated to the home and 20% to the land. So the home would sell for $640,000 and there would be a short-term capital gain of $240,000. The land would sell for $160,000 and would result in a Long Term Gain of $60,000.

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

These transactions would be reported on schedule D.

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

If you are able to do a 1031 exchange would potentially could defer the gain of $300,000. Your basis in the property being sold ($496,000) would carry over to the new property. If you receive cash (also known as boot) you would recognize gain. If you are relieved of debt, this would also create a situation where a gain would be recognized.

Ask Your Own Tax Question
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

I hope you found this information to be beneficial. If this answered your question please take a few moments to rate my response. A rating is needed in order for me to receive credit for helping you today. The rating bar is located at the top of the page – ranging from 1 to 5 stars. If you need me to clarify aspect of my response or if there are additional areas of the question that you would like me to consider please let me know. I would be happy to continue the discussion. It has been my pleasure helping you today.

Ask Your Own Tax Question
Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,328
2,328 Satisfied Customers
Experience: Certified Public Accountant

Mark Taylor is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
Form 8300. We are doing a business to business transaction.
We are doing a business to business transaction. The form is not clear on how to compete. Do we complete Part I f … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What are the taxes rates 2016 for term gains in irrevocable
what are the taxes rates 2016 for long term gains in irrevocable trusts … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
What is the taxable capital gain for each 50% owner
What is the taxable capital gain for each 50% owner (divorced couple) on a 1031 Exchange property where only one owner meets the 2 of 5 years occupancy test and one of the 50% owners is now remarried?… read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Is the sale of customer list a capital gain or ordinary income?
Is the sale of self-created intangibles, such customer lists, digital files, web sites, etc subject to capital gain or ordinary income treatment?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Are you familiar with Capital Gain taxes on rental property?
Are you familiar with Capital Gain taxes on rental property? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question about the capital gain tax on the real
I have a question about the capital gain tax on the real estate property. Property located in New York City. My parents and I are the joint owners with the right of survivorship. Mortgage is in their … read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
31 satisfied customers
I sold a rental property at a loss (no capital gains);
I sold a rental property at a loss (no capital gains); however should I pay the $133,000 on the principal of my house I owe 166,000 at 2.8% or buy another rental? … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Tax question is there anyway to offset a capital gain of 60
Tax question is there anyway to offset a capital gain of 60 to 70k by buying another commercial property… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
We have $400,000 in capital gains for the sale of our
We have $400,000 in capital gains for the sale of our California home of … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I need to know how to calculate capital gains tax on a
I need to know how to calculate capital gains tax on a rental property I am selling so I know how much i will have to pay on my 2017 tax return. Can you help? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
How do find find the capital gains on a building you sold?
how do find find the capital gains on a building you sold ? The building was in a revocable trust hand by my husband and myself . My husband dies 2 years ago and I just sold the building last month … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
727 satisfied customers
Estate capital gains tax rate for 61, single, unable to
estate capital gains tax rate for 61, single, unable to work, is claimed as a dependent form sister,only income collects $500 month stipend from gov., which pays for health insurance and meds. is gett… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
What is the capital gains tax on proceeds of the sale of a
What is the capital gains tax on proceeds of the sale of a home? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant (CPA)
2,328 satisfied customers
A Form 1041 is filed for a Credit Shelter Trust & shows a
A Form 1041 is filed for a Credit Shelter Trust & shows a loss on the Taxable Income line (Page 1, line 22). Is this loss carried forward?… read more
abci168
abci168
Principal
27 satisfied customers
Capital Gains Question: My parents have a rental property
Capital Gains Question: My parents have a rental property they bought for $150,000 several years ago. The property is now worth around $500,000 dollars with a $350,000 mortgage. They want to gift me t… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Second opinion] Has the tax rate in Peru on capital gains
Second opinion] Has the tax rate in Peru on capital gains for non residents recently been changed? I heard it is now 5% and no longer 30%.… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
THE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS
tHE irs STATED THAT TE TAXCALULATED ON SCHEDULE D WAS INCORRECT . i CAN NOT ACCERSS dD. p;EASE DVISE HOW I CAN ACEESS THE SCHEDULE … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Can you file schedule D for capital gains and losses if you
can you file schedule D for capital gains and losses if you take the standard deductions? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant (CPA)
2,328 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x