Selling land & managing gains liabilities

inspiredsports

Well, after 20 years of paying taxes, mowing and maintaining 8+ acres, we are contemplating selling off a parcel. In 2004 I subdivided into 2 lots, leaving our home on 2 acres and splitting off a beautiful 6.5 acre lot where we planned to build our dream home.

Well times changed, my business turned and the first 2 of 4 entered college. My wife and I came to the realization that building a new home was no longer in the cards.

Now I've become convinced that selling that 6.5 acre lot this summer may provide the best return we'll see for perhaps the next 20 years.

The proceeds will be used to cancel almost all of our existing debt and will put us back on a healthy footing, but I'm worried about tax consequences.

I will certainly run everything by my CPA, but wanted to first gather any ideas/strategies that others might have be aware of to help lower my tax liability if we decide to sell.

AudioGenics

looks beautiful ! best of luck in this market,

.....Do you mean to tell me, Katie Scarlett O'Hara, that Tara,
that land doesn't mean anything to you?
Why, land is the only thing in the world worth workin' for,
worth fightin' for, worth dyin' for,
because it's the only thing that lasts.

inspiredsports

Thanks! My realtor theoretically has a buyer, we just need to decide if we are ready to part with it. Then managing the tax aspects becomes the unsavory challenge.

Polkersince85

See what your CPA says. The old saying "Don't wait to buy land, buy land and wait." still holds true. Once you sell it, it's gone for good.

dpowell

Tax rates for this year are still 'low' compared to what they will be next year if the Bush tax cuts are allowed to expire and who knows what other tax increases may come down the pipe over the next few years......especially in the capital gains dept. Best of luck selling it. Looks like some beautiful land.

inspiredsports

Polkersince85 wrote: »

See what your CPA says. The old saying "Don't wait to buy land, buy land and wait." still holds true. Once you sell it, it's gone for good.

That's what my Dad told me in 1990 when we purchased. We were looking at much larger homes on 1.5 to 3 acre lots when we happened upon this slightly smaller home on 8.5 acres. Dad wisely said about raw land, "They aren't making any more of it", and that guided our purchase.

Unfortunately, I have so much debt now it sometimes keeps me up at night and I'm afraid we are at risk of losing the whole thing if things continue to get worse, and it is my opinion that both higher interest rates and higher unemployment rates are fate accompli. Fortunately, the sale will square everything and we will still have 2 acres which is more than we really deserve. But yes, it sure has been nice having our own "metropark" minus the other visitors.