Part of the sale proceeds has to be allocated to the house (asset) and part to the land. The same goes for the selling expenses. One way to do this is to add the cost of the land to the cost of the house and then divide the cost of the house by the total. Then use that percentage to determine the house (asset) and land portion of the sale.
For instance, say the land cost $25,000 and the house cost $75,000. The total is $100,000, and the house cost of $75,000 divided into the total gives you the house percentage of 75%. So, if the sale price is $200,000, multiply that by 75% (.75) and that means the Assets sales price is $150,000 ($200,000 selling price times 75%.) The land sale price would be the total sale price of $200,000 less the asset sale price of $150,000, or $50,000.
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