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Selling Land |
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I own land in North Dakota. I am going to sell the land for 75,000. I purchased the land for 45,000. I want to purchase land here in Minnesota and put some of the money into my house.
What kind of taxes am I facing on the profit margin I will see. Is there any way around paying these taxes in a cross state venture.
Thanks for your help.
Tim |
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If the land was held for investment purposes, it's just possible you could postpone (not eliminate) some of your capital gains tax by using a Section 1031 exchange for the purchase of the new land. You could consult with a CPA or other qualified intermediary to see if that could be done. But there's not all that much money involved, so it may not be worth the trouble or expense of setting it up. Assuming you've owned the land for at least one year, your long-term capital gains tax rate is no more than 15% federal, less than $4,500 tax on what you'll clear after selling expenses. State tax is less and I'm not sure how it's figured but you'll only have to pay in one state, I'm certain.
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Edith
Originally published on December 5, 2007 |
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