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I am a resident of North Carolina. I sold a house in in 2016

Customer Question
I am a resident of...
I am a resident of North Carolina. I sold a house in Virginia in 2016 which my late husband and I built in 1964 for his parents to live in. No rent was collected, and it has mostly been unoccupied since they passed on in the early 90's. I rolled the money from the house sale into a small RV. How do I figure capital gains tax?
JA: What state is this in? And how old is the RV?
Customer: The house is in Virginia. The RV is new.
JA: Has anything been filed or reported?
Customer: I have paid property tax(reported on my NC tax form) and insurance. All the upkeep of the property, including mowing has been our expense and not reported.
JA: Anything else you want the lawyer to know before I connect you?
Customer: I feel I do not have the knowledge to know the right questions to ask, but I am concerned about capital gains tax, although this house was not built for profit making, but to provide a home for loved ones , and I am now unable to do the mowing and work that it requires.
Submitted: 1 year ago.Category: Tax
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11/15/2016
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
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Hi, my name is Mark. I will be happy to help you with your questions. The gain would be determined by the adjusted basis of the home. The adjusted basis would be the original purchase price plus any improvements. The sales price less your adjusted basis would determine the amount of capital gain. The gain would be taxed at the federal level between 0 and 20%. How much do you expect the gain to be?

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Customer reply replied 1 year ago
That is my dilemma. We purchased the lot, designed the house and did a lot of the work ourselves. There is no record of a house purchase.
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Do you know how much it cost to build the home?

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Customer reply replied 1 year ago
I would have to guess 25 - 30 thousand dollars (in 1964)
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Did you make any improvements? What was the cost of the lot?

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Customer reply replied 1 year ago
I think the lot was 8 thousand. We added central air, new kitchen countertops, asphalt driveway, thermal replacement windows,and a storage building.
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Do you know the cost of the improvements?

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Customer reply replied 1 year ago
My guess would be 10 thousand
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Sorry I had to step away from the computer. So it sounds like your basis would be somewhere between $43,000 and $48,000. What did the home sell for?

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Customer reply replied 1 year ago
I netted 93 thousand
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

Do you know what the sales price was? Were there any loans against the property?

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Customer reply replied 1 year ago
No loans. Sales price was $100,000. Would travel for maintenance - mowing, etc 3 hrs. round trip be considered? Insurance and property taxes?
Tax Professional: Mark Taylor, Certified Public Accountant (CPA) replied 1 year ago

The property taxes would be an itemized deduction on Schedule A. The travel and general maintenance costs would not be deductible.

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Mark Taylor
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