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Land Sale - Tax Help

MO-APE

MO-APE

Member
I know this isn't a financial advice forum, but I know there are a lot of land investors on here so figured I'd reach out. I sold my first rec land property this Summer, and decided not to do the 1031 exchange as I didn't have that big of a long-term capital gains profit (owned for 3+ years). This land was 100% recreation only and didn't have yearly income from crop/pasture rental, timber sales, CRP, etc..

I of course will be using a qualified accountant when I file, but in the interim (so I can start gathering receipts, etc.) what are some of the write offs you've guys used to the reduce capital gains liability?

Here are some things I've gathered so far:

  • Realty / Sales fees
  • Fencing / Gates
  • Land Survey costs
  • Tree Plantings
  • Gravel for Private Drive
  • Large Deer Shooting House that stayed with the farm (over 2K)
I wonder if I could pull off other land development costs, like permanent food plot construction (hired a dozer), fees for conservation contractors for prescribed fires, etc...I saved great documentation on everything. Thoughts?

Thanks in advance!
 
I am not a professional in this area, but another thought came to mind...did you do any maintenance or repairs on any buildings or grain bins?
 
Any type of improvement should be included in your cost or basis. Permant buildings a usually depreciated over many years. During the years you own the property most things are usually depreciated any remaining portion would then be available to add to the cost basis.
If you are going to continue owning property's and have a need for new equipment those purchases made in the same year can offset some of the gain.
 
hans1 said:
Any type of improvement should be included in your cost or basis. Permant buildings a usually depreciated over many years. During the years you own the property most things are usually depreciated any remaining portion would then be available to add to the cost basis.
If you are going to continue owning property's and have a need for new equipment those purchases made in the same year can offset some of the gain.
Click to expand...



Curious how can the purchase of equipment offset the gain on the sale of rec land?
 
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