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May 28, 2022
Question

I have sold some land that was gifted to me by a family member. I am currently unemployed and want to determine how much I will need to pay in capital gains tax

  • May 28, 2022
  • 3 replies
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3 replies

Employee
May 28, 2022

How long did you own it?

Critter-3
May 28, 2022

What was the gifter's basis in the land?  

What was the fair market value of the land when it was gifted ? 

When was it gifted ? 

 

What are you selling if for ? 

Do you have any income from any sources ? 

Rick19744
Employee
May 29, 2022

Another fact that would be good to know is if you are filing single or married filing joint.

 

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.
May 29, 2022

without a lot more info such as holding period and taxable income without the gain and the gain no one can give you an amount. it could range from 0% to over 20%

Employee
May 30, 2022

Before we can tell you (and before you can file) you need to know:

1. What did your relative pay for the land? (This will be in the county records.)

2. When did they give it to you?

3. Was it farmland or timberland?  (Money-making land?).   Or something else.

4. Did you or the previous owner ever elect to "capitalize your carrying costs."  (If you don't know, the answer is "no".)

5. Did you and the previous owner together, own the land for more or less than one year (you combine both periods of ownership).

6. What was the selling price.

7. What is your other income for the year?

8. What is your marital status?

9. Do you have any dependents?

 

Now, I am going to make 4 assumptions to give you a rough guess of one scenario.  If we assume that,

a. you have no idea what the purchase price was and can't prove anything, and

b. you will have no other income for all of 2022, and

c. you are single with no dependents, and

d. you owned the land more than one year

 

Then this is how the sale will be taxed.

a. the entire selling price is your taxable capital gain

b. the first $41,000 is tax-free

c. the next $417,000 is taxed at 15%

d. anything over $459K is taxed at 20%.

 

But your result may be very different depending on your other facts.