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Returning Member
posted Jan 22, 2020 10:49:10 PM

Cost basis when selling a portion of land surrounding my home

A few years ago I purchased a large plot of land with a house on it. I built a guest house on a piece of it, next to the house which I lived in as my primary residence. 

 

I recently sold a portion of that land and the guest house, but I still live in the house as my primary residence. How do I determine the cost basis for just that portion of land? Thank you.

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1 Replies
Expert Alumni
Jan 23, 2020 10:19:35 AM

The starting point would be knowing what the Fair Market Value of the land was at the time of purchase. You could look back at tax records or consult your realtor if you have no idea what it would have been.'

 

Once you have an amount, you can prorate it by square footage.