Sold a property in August

[Afaessel]

We sold a lot that we purchased June of last year. We made some money on it. We already paid some taxes within escrow, but should we expect to owe more on it? Federal? Capital Gains? We owned it for less than a year and our profit was $85,000

[NancyM5]

The $85,000 gain on the sale of the property will be added into all of your other taxable income for 2022.  Any tax due will be calculated at that time.  You can use Tax Calculator 2022 to determine your taxable income and tax due for the year.  

Also, be sure that you have an accurate basis for your land before calculating the $85,000 gain.  IRS publication 551 has a section titled "Real Property" that lists items that can be included in the basis.  For example, there may be closing costs  from the purchase of the land that need to added, such as legal fees, recording fees, survey costs, or transfer taxes.  Did you make any improvements to the land while you owned it, such as sidewalks, roads, or other local improvements? And finally, be sure to include the closing costs from the sale of the land.