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Would I pay capital gains if selling raw land to buy a home?
Posted on 8/14/23 at 3:53 pm
Posted on 8/14/23 at 3:53 pm
I've had raw land for a couple years now, nothing there but some a couple barns and horse stalls.
Considering selling it to buy land with a home already on it.
Would I be able to sell the land and my primary residence and use a 1031 while purchasing new home to avoid capital gains?
Considering selling it to buy land with a home already on it.
Would I be able to sell the land and my primary residence and use a 1031 while purchasing new home to avoid capital gains?
4
Posted on 8/14/23 at 4:20 pm to DownSouthDave
Raw Land? yes. Primary residence? No. 1031 has to be investment properties.
Posted on 8/14/23 at 4:25 pm to TTownTiger
Thanks.
ETA: Any other way to easily reduce cg? Probably a question for my CPA? Just considering it right now, curious what my options are.
ETA: Any other way to easily reduce cg? Probably a question for my CPA? Just considering it right now, curious what my options are.
This post was edited on 8/14/23 at 4:27 pm
Posted on 8/14/23 at 4:55 pm to DownSouthDave
Not a CPA, but if you have lived in your primary residence greater than 2 years, unless it has changed, you won't pay capital gains on it.
raw land would have capital gains and could use a 1031 only if you are buying another investment property not to buy primary residence.
raw land would have capital gains and could use a 1031 only if you are buying another investment property not to buy primary residence.
Posted on 8/14/23 at 6:49 pm to DownSouthDave
Anything not your primary residence will have capital gains. Talk to your cpa, you may need some farm implements to help with the improvements in order to sell the land.
Posted on 8/14/23 at 7:04 pm to DownSouthDave
If you are going to live in the new home you can’t do a 1031.
Posted on 8/14/23 at 9:35 pm to DownSouthDave
How much have you actually gained on this land?
You’d only owe LTCG on the difference in sale price minus purchase price and any improvements.
You’d only owe LTCG on the difference in sale price minus purchase price and any improvements.
Posted on 8/15/23 at 8:25 am to sig3197
quote:
Not a CPA, but if you have lived in your primary residence greater than 2 years, unless it has changed, you won't pay capital gains on it.
I am a CPA. The rule is must live in 2 of the last 5 years and you get at 250k deduction on increased value (500k if married and spouse claims as primary residence as well).
Second statement is correct.
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