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capital gains on property sale
Old 07-03-2006, 07:57 AM   #1
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capital gains on property sale

I have some land for sale, 25% down, I'll finance the rest. Does anyone know
how the capital gains would be paid on this? thanks.
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Re: capital gains on property sale
Old 07-03-2006, 08:25 AM   #2
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Re: capital gains on property sale

See IRS Publication 537

http://www.irs.gov/pub/irs-pdf/p537.pdf

Essentially you can do it two ways. Report entire gain in the year of sale or report a portion of the gain each year as you receive the proceeds from the sale using Form 6252. Good luck.

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Re: capital gains on property sale
Old 07-03-2006, 04:52 PM   #3
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Re: capital gains on property sale

This is a situation where paying the extra few $$ for TurboTax Premiere really pays off. I sold some raw land in 2005 on a 10 year RE contract. I opted to spread the reporting of the capital gains over the long run since my marginal tax rate is due to drop dramatically when I retire next year, making me eligible for the 5% cap. gains rate.

I just plugged all the relevant numbers into TurboTax and it did the calculations and spit out the appropriate forms.
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Re: capital gains on property sale
Old 07-04-2006, 02:08 PM   #4
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Re: capital gains on property sale

Thanks for the info!
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