To avoid paying capital gains tax on the sale of land, must you own it for two years?

Answer 1

No, the land must be part of your primary residence. Plus, the gain is only deferred. Eventually, taxes will have to be paid.

If its just land that you own, developed or not, you will pay capital gains tax if you have owned for at least one year. The tax rates for capital gains are capped at 15% while the rates for ordinary income can be as high as 35%. So, given the choice, I would rather pay capital gains tax.

Answer 2

You are talking about a personal residence, you must live in it for 2 yrs to avoid paying tax on the gain. For the sale of land, I'm sorry but you will pay tax on it. Capital gains rate is pretty low for most people though.

Answer 3

If you're talking about raw land there is no way to avoid paymemt of the capital gains tax.

There is an exclusion for the gain on the sale of a PRIMARY RESIDENCE if you have lived in it for two of the five years immediately prior to the sale. Unless the land was also your primary residence it would not be eligible for the exclusion.

Building a home on the land or placing a trailer with living accomodations on it would all qualify the land as a primary residence as long as you lived there for two of the five years prior to the sale.

Answer 4

If it's land, not a residence, then you'd have to pay taxes, but if you owned it for over a year, it would be long term capital gains tax. The exclusion from taxes for property owned over two years only applies to a primary residence.

Answer 5

To qualify for the exclusion of up to $250,000 in gains, it must have been owned and used as a primary residence by the taxpayer for at least 2 of the 5 years prior to the sale.

Answer 6

You can postpone paying tax on certain land for investment purposes by using a "like-kind" exchange. While the transaction itself requires careful planning and use of a third-party, you essentially "trade-up" instead of selling outright. You can do this without any time limit for holding any of the properties in this process. You only realize the gain when you sell off a property and receive something not in "like-kind", like cash for land.

This is often referred to as a 1031 exchange after the section of the Internal Revenue Code.

Answer 7

a minimum of two years on the date of the sale ok sounds like you should no longer have project qualifying for the sale of substantial abode regular position of abode exclusion in the course of the 2014 tax filing season for the 2013 1040 earnings tax go back of 250000 exclusion volume of benefit for a unmarried taxpayer excellent. wish that you locate the above enclosed assistance sensible. 08/09/2013

Answer 8

In the US, you have to own it for two years and have lived in it for two of the last five years. Also, there are restrictions on how often you can use this trick.