My mother sold a portion of her land (3 acres) to us at a very cheap price ($3,000) approx. 3/4 years ago...she wanted us to build a house right beside her but she has now passed away. I have now sold that land for $190,000. Will I need to claim the difference as captial gains? Are there any adjustments such as the selling price minus fair market value instead of what mom sold it to us for...etc?
Could we avoid the capital gains tax if we rolled the proceeds over to our current home mortgage?
We live in Iowa - will we have to pay state taxes as well?
thanks in advance.
