Will I need to pay capital gains?

[Armando Carrera]

Hi everyone,

Wife and I purchased a vacant lot with the plans to build. We decided to go a different route. 
we purchased in may of 2022 for $80k. We invested another $20k for improvements, draftsman fees, permits etc. so all in we’re in it $100k. We are listing it for 120k.

If/when it sells, at say 100k.

Would we need to pay capital gains?

Any help would be appreciated 

thank you 

[Peter Dukaj]

Hi there,

It's great that you're seeking advice on this matter. I'm not a financial expert, but I can offer some general information that might be helpful. Capital gains tax is typically levied on the profit made from the sale of an asset, such as real estate. The gain is calculated by subtracting the purchase price and any eligible costs (improvements, fees, permits, etc.) from the selling price.

In your case, if you sell the vacant lot for $100k and your total investment is $100k, it seems like you might not have a capital gain. However, it's crucial to consider other factors such as transaction costs, real estate agent fees, and any outstanding loans related to the property.

Additionally, tax laws can vary, so it's advisable to consult with a tax professional who can provide personalized advice based on your specific situation and local regulations. They can guide you on any exemptions or deductions that may apply to your case.

Remember, this information is not a substitute for professional financial advice, and it's always a good idea to seek guidance from a qualified expert for your specific circumstances.