How do I determine long or short term capital gain? I added .2 acres purchased this year to 1.8 acres (bought 8 years ago). Now want to sell as 2 acre lot.

Forum|Forum|7 years ago
June 6, 2019
1 reply
15 views

The cost of the new land .2 acres is $25000- sale just completed. the 1.8 acres cost was $45,000 - it is 45% part of our existing property purchased 8 years ago and is being partitioned off with the newly purchase property as a 2 acre lot. We spent $25000 on zoning process to meet county minimum lot size of 2 acres and other requirements.

Would like to sell soonest but want to know tax liability before I jump at offers on table.

TurboTax Deluxe Windows

Best answer by MinhT1

You should prorate the sales price between the first lot and the second lot based on the acreage.

The cost of the zoning process can also be prorated between the two lots and added to their respective cost bases.

Capital gains on the first lot are long-term. Those on the second lot are short-term.

MinhT1Answer

Level 15

You should prorate the sales price between the first lot and the second lot based on the acreage.

The cost of the zoning process can also be prorated between the two lots and added to their respective cost bases.

Capital gains on the first lot are long-term. Those on the second lot are short-term.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

taxquestion-2Author

Level 2

Wow that was fast- thank-you Minh T. Your reply makes perfect sense. Is there an IRS code or form I would use to submit the math? The 8949 document is pretty sparse.
Thanks again.