Land Sale
We just sold a lake lot which we held more than 15 years. Needless to say the capital gain was quite substantial. Do we need to reinvest in another property to avoid paying taxes? Any advise would be appreciated.
We just sold a lake lot which we held more than 15 years. Needless to say the capital gain was quite substantial. Do we need to reinvest in another property to avoid paying taxes? Any advise would be appreciated.
Unless you used a Qualified Intermidary to serve as agent to hold proceeds, it's too late to use 1031 exchange benefit afforded by IRS.
Cheer up! At 15%, the long term capital gains tax is the lowest it probably will ever be. Pay the taxes. Buy another property and watch your money grow again.
It is not too late if your sale transaction has not closed yet, but you would have to acquire like kind replacement property in order to qualify for a tax deferred like kind exchange (Section 1031). The land that you have owned for more than 15 years would be classifed as investment property, so you would be able to acquire any other type of real estate as long as you have the INTENT to HOLD the property for investment, rental or use in your business.
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