Gifted Land sold

[Randy19]

In 2007 my mother gave me 10 acres that she and my dad purchased in 1965, Arkansas. My mother passed away in 2013. I sold the 10 acres on January 27, 2020. The land is undeveloped. Price of land from 2007 to present day hasn't changed due to location and town it is located. (This is information I received when calling a real estate agent in the town land is located.) My questions are how do I declare this on 2020 taxes and how to figure any taxes I will have to pay. Also, will this add to my gross income in 2020, putting me in a much higher tax bracket.

[LudwigVan_fan]

Basically, your basis (cost) in the land is what your parents paid for the 10 acres in 1965.  You received the land as a gift, the basis in the gift is the donor's basis (parents) plus what ever gift taxes (if any) were paid.

When you sold the land, you have the selling price, less the basis (cost; 1965 prices) = long term capital gain.

The gain will be added to to your gross income/taxable income.  Since it is undeveloped land, and you basically held it for investment, it should be taxed as long-term capital gain.

What you need to figure out (if it hasn't all ready been done) is what your parent's paid for the land in 1965.  That is your basis...not when you received the land in 2007. 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**