My mother gifted a parcel of land to me in 2015 (been in family 40 years). I sold it in 2017. Do I owe capital gains tax ? I thought gifts were tax free up to a limit.

[duncandog2008]

I was not anticipating paying a capital gains tax.  My mother's tax advisor told her She could gift me the land and I shouldn't have to pay capital gains.

[BobinCT · Accepted solution]

Gifts are free of gift tax up to a limit.  But the sale is taxable to you.  If you mother's tax advisor told her that you wouldn't have to pay capital gains tax when you sold the property they told her wrong.

The tough part is figuring out the profit.  Since it has been in the family 40 years, it has probably passed through a couple of generations.  So you need to figure out the ownership chain, dates, and whether the change of hands was due to inheritance or gifting.

It matters.  There will be long term capital gains tax to pay.  But determining the "cost basis" is very important and that will take some research.