I have undeveloped property that I have owned for several years and paid 40K. I now have an offer to sell the property for 175K. I understand that I will owe Capital Gains tax (up to 20%) on the realized income, but have two questions.
1) Is the realized gain (135K) considered "income" for tax reporting purposes? In other words, will I owe income taxes and capital gains tax on the proceeds?
2) I am currently collecting Social Security. If the proceeds from the property are considered income, will that income have an adverse effect on my SS or Medicare payments?
Thanks for your time.
