how do I calculate Federal taxes on the sale of raw land owned for15 years.?

Question

I paid taxes and homeowners fees for 15 years. There are no buildings on the land. Also had to pay for an electrical hookup, although no electrical equipment was installed.

Answer 1

This appears to be a building lot that you purchased for personal use and then never built. You did not rent this land.

Your basis of the land is your purchase price plus the cost of the electrical hookup. There may be other items that could be added to the basis, you may consult a local tax preparer and provide more details.

You report the sale on Schedule D, providing the date of acquisition, date of sale, sales price (less sales commissions), and your basis. Your gain is the difference of the sales price and your basis. It will be taxed as long-term capital gains. The maximum tax rate on your gain will be 15%.

The taxes you paid could have been deducted as real estate taxes on Schedule A. The homeowner's fees are not deductible.

Answer 2

You need to clarify your question further. Did you deduct any of the expenses paid connected to the investment land you owned for 15 years? In tax year 2007 the long term capital gains tax federal is a whopping 5%. Figure your basis and subtract it from what you sold for; then mulitply it by 5%. Example.....basis 10,000....sold for 15,000......gain is 5,000.....times 5%.....$ 250.00 tax.

Answer 3

The property taxes were deductible each year on your 1040 schedule A.

Interest to pay for any investment property would have to have been capitalized (added to basis).

Utility hookup is a capital expense.

Homeowner fees are not deductible.