AboutHelen P. O`Planick, EA Expertise I am a tax professional, with experience in individual taxation. I would prefer not to answer questions about non-resident aliens or corporate taxation. Please do not ask me state related questions, unless the state is Pennsylvania. There are 42 taxing states and 42 TOTALLY different sets of state tax law.
Experience I have been preparing tax returns almost all my life. I have been in professional practice for 25 years and I am enrolled to practice before the Internal Revenue Service.
Organizations National Association of Enrolled Agents
Publications I am a prior Money Magazine Tax Test taker and have been quoted extensively in all media including monthly periodicals and books by tax authorities.
Question Hello, when my husband and I sold our old farmhouse with 7 of 17 acres 10 years ago and bought another house, retaining 10 acres to build on later. We are now trying to sell a few of the acres in order to pay off some debt and fix up our current house. We want to then sell our current house and build a new home on the remaining land. How much will we pay in capital gains on the property we sell? Or can we avoid capital gains taxes if we put all the money from the sale into our current home instead of paying off debt?
Thanks so much for your help.
Malory
Answer Your basis is whatever you paid for the land when you bought it.
It does not matter what you do with the money, you will pay taxes on it first.
You take your sales price less the basis and that is your taxable income. It is long term, so federally, it is capped at 15%. So if your gain is $10,000, federal taxes are $1,500.
