Capitol Gain question

2 Replies

I bought a property a couple of years ago for $125,000. The state purchased part of the land the home is on for $135,000 to build a new road, however I still have the house. How would my capitol gains work in this situation. My thought is the capitol gain would be $10,000 this year and whenever I sold the home the entire sale price would be a capitol gain at that time. Is this correct? Thanks, Allen.

Originally posted by @Allen Jones :

I bought a property a couple of years ago for $125,000. The state purchased part of the land the home is on for $135,000 to build a new road, however I still have the house. How would my capitol gains work in this situation. My thought is the capitol gain would be $10,000 this year and whenever I sold the home the entire sale price would be a capitol gain at that time. Is this correct? Thanks, Allen.

Not correct. 

You have not provided enough detail to help you. You need to allocate the basis of the original purchase to the part of the land that you are selling.

You cannot use the entire basis to calculate the gain on 10k gain.