Selling part of acerage in Texas - Gary Gauvin Replies for me -
QUESTION:
I have a property in texas that is a house with 260 acres of
land that was my primary residence for over 2 years. The entire property isunder
contract of sale to a person, to be closed by 12/31/07. However this person is
asking to pay/buy part of the land now because he is doing a 1031 exchange and
then buy the rest before the end of the year. If I agree to sell part of it now,
am I subject the CGT on the land piece being sold before the house sale ? or is
it ok if it is in the same tax year and to the same
person???
____________________________________--
david ingram replies:
I sent your question off to Gary Gauvin (www.garygauvin.com) an enrolled agent (and ex-partner of mine in Ottawa, Canada) who practices just outside of Dallas. His reply follows. Of course, if you need professional help with this, you should get hold of Gary at [email protected]
Gary Gauvin wrote:____________________________________--
david ingram replies:
I sent your question off to Gary Gauvin (www.garygauvin.com) an enrolled agent (and ex-partner of mine in Ottawa, Canada) who practices just outside of Dallas. His reply follows. Of course, if you need professional help with this, you should get hold of Gary at [email protected]
As long as the land is attached to, or surrounding the house, was used as part of the principal residence, and is sold within 2 years before, or after, the sale of the house, you get one exclusion. So multiple sales can qualify for the one exemption limit of $250,000 (500,000 MFJ) An issue is frequently how much vacant land counts. In "Bennet" an additional 65 acres (that was not used in a business) was allowed as exempt. Also in "Schilcher" a whole 51 acres was allowed when 7.5 acres was used for a horse breeding business. The court note that "residential purpose" may include appreciating nature, living in open spaces, horseback riding and enjoying unobstructed views of the countryside. ------------------------------------------------------------- Thanks Gary
david
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Phone consultations are $400 for 15 minutes to 50
minutes (professional hour). Please note that GST is added if product remains in
Canada or a phone consultation is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Just a guideline not etched in
stone.
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