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Capital Gains - unimproved real estate
Posted on 6/20/21 at 6:22 pm
Posted on 6/20/21 at 6:22 pm
I have what hopefully is a straight forward, easy question.
In 2018, I had about 38 acres deeded to me (land is in Tennessee) by my grandmother prior to her passing. There’s no house, valuable timber, etc.
I’m wanting to sell it. Will I have to pay capital gains on it? I’m thinking I can get anywhere from $250,000 - $330,000 according to the realtor.
Also, not sure if helpful, but I’m living Georgia.
In 2018, I had about 38 acres deeded to me (land is in Tennessee) by my grandmother prior to her passing. There’s no house, valuable timber, etc.
I’m wanting to sell it. Will I have to pay capital gains on it? I’m thinking I can get anywhere from $250,000 - $330,000 according to the realtor.
Also, not sure if helpful, but I’m living Georgia.
5
Posted on 6/20/21 at 7:17 pm to GentleJackJones
You will need a tax professional. Was it a gift, part of an estate at death, etc??
You may get a basis from 2018 (and retro appraisal can be done if not done at the time).
Generally you should get an appraisal at time of receiving the property so tax strategy can be planned (optimally before the transaction occurs).
You may get a basis from 2018 (and retro appraisal can be done if not done at the time).
Generally you should get an appraisal at time of receiving the property so tax strategy can be planned (optimally before the transaction occurs).
This post was edited on 6/20/21 at 7:20 pm
Posted on 6/20/21 at 7:18 pm to GentleJackJones
You would pay capital gains tax on the gains (difference between your baiss and the sales price). I'm guessing it was gifted to you by your grandmother? If so, you would have her basis in the land, so ultimately I guess it would depend on what that number is.
Posted on 6/20/21 at 7:31 pm to GentleJackJones
You got some bad advice since it was gifted before she died. RIP your taxes. You get her basis in the property -- whatever she paid for it years ago
Posted on 6/20/21 at 7:54 pm to GentleJackJones
Hopefully, she acquired it not too long before her passing.
Posted on 6/21/21 at 8:15 am to GentleJackJones
Your basis in the land is what your grandmother paid for it (had she waited until she died and you inherited it, your basis would be the FMV at the time of death).
Any chance there are still some records around that might have that amount listed? Like purchase docs from when she was alive?
Failing that, in Tennessee you may (not sure) be able to search the courthouse records to see if a value is listed on the deed when she purchased it.
If that doesn't work, I would see if you can at least find out when she bought the property, and do some sort of retrospective appraisal.
It will be a long term capital gain.
Any chance there are still some records around that might have that amount listed? Like purchase docs from when she was alive?
Failing that, in Tennessee you may (not sure) be able to search the courthouse records to see if a value is listed on the deed when she purchased it.
If that doesn't work, I would see if you can at least find out when she bought the property, and do some sort of retrospective appraisal.
It will be a long term capital gain.
Posted on 6/21/21 at 10:06 am to LSUFanHouston
quote:
(had she waited until she died and you inherited it, your basis would be the FMV at the time of death).
This may soon change, Biden's current tax proposal would eliminate step up basis for anything over $1MM. This will hit small businesses and family farms especially hard.
Posted on 6/21/21 at 1:59 pm to ithad2bme
quote:
This may soon change, Biden's current tax proposal would eliminate step up basis for anything over $1MM. This will hit small businesses and family farms especially hard.
Correct. And that 1M will have to be allocated.
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