Capital gains tax for mobile home property

[MLL06]

My wife and I live in a 55plus mobile home park. The park was shareholder owned. We as a community voted to sell our land and each shareholder received a check for the land, but we retain the house. Instead of paying an HOA, now we pay rent.  Is the sale of the land subject to capital gains? The amount was $230,000, and deducting the $43,000 share cost, leaves a gain of $187,000.

[melj1]

When your HOA decided to sell the land, you were an owner of an undivided interest. You will have to report your share of the sale. So the $230,000 sale price would be divided by the number of homeowners involved. Your cost basis would also be divided equally. The gain or loss is taxable at capital gain rates. The rent you are now paying would only be deductible it you were renting out your home.

[MLL06]

Thanks for the reply. Let me add a little light. There were 188 shareholders in the purchase, each shareholder of the park received $230,000. My lot share cost $43,000. We occupied the land for over 4 years. Is there a capital gains tax to be paid on the land sale where I still retain the ownership of the building on the land?

[melj1]

Based on the additional information, you would report the sale of the land at $230,000 and your basis or cost would be $43,000. You would be taxed on the gain at the long term capital gains rates. The building would be a separate asset and a gain or loss would be reported at the time you sell it. As your residence, it would be subject to those rules.