asparrow08
Level 2
04-08-2021
08:19 PM
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Taxpayer purchased land in early 2019, and built a house on it in 2020. He intended on moving into the house, but to sell instead late in 2020 before moving in. Land was held for more than a year, so I believe that portion of the sale should be considered a long-term capital gain with the remainder being short-term. Someone can correct me if I'm wrong, but I haven't found anything that says you CAN'T do this.
My problem is splitting the sale price between land/building. I looked at the tax assessment from the county and considered using that to split the cost between land and building, but it would result in a large gain on the land a loss on the building. Any thoughts on this?