Tax implications on sale of vacant land - Posted by Rodney
Posted by Rodney on October 09, 2003 at 20:05:09:
I have approximately 8.5 acres(free & clear) in a nice sub-division where big custom homes are the norm in the estate area. In the sub-div two new builders, KB Homes and Mercedes Homes are building there with Eagle Homes and a bunch of custom builders. The property is about a few long blocks from the golf course, park, tennis courts and formal city area. The legal front side of this corner lot is about 465?. The right side of this lot is 795? and also faces a paved road that goes straight into the sub-division?s city and entrance. Facing it from the front, the left extreme corner touches a huge man-made lake. If someone were to construct there they?d have a nice uninterrupted view of the lake.
I had this property for appox. 10 years and paid $45,000.00. The comps I?ve pulled from the county records show a lot on the same street, and of the same exact size on the other corner, sold for $170,000.00 about 5 months ago. The acreage selling price throughout the estates varies from 10k to about 35k/acre.
I set up my price structure as follows:
. Entire 8.5 acres 25k(212.5k)
· Four acres lakeside view 32.5k/acre (130k)
· Four acres corner side 28.5/acre (114k)
Last month I put up a FSBO sign and have gotten about 1 call on average per day inquiring information and price. I got two, possibly three, callers who are interested in the entire lot. One, I don?t know if he was serious, but he wants to close right away for 187,000.00 cash. Another is also very interested at 190,000.00 for the entire 8.5 acres. He told me not to negotiate with anybody that he will buy it from me as soon as his son comes in from Baltimore on October 23, 2003. these two persons own land in the estate area and seem very serious.
My questions are:
Should I let each other know of their existence, and offers, to probably get a better offer? Or should I leave these offers as is and sign the first one who gives me a non-refundable 5% deposit?
When I sell, how can I set myself up to minimize the tax bite? Can I buy another property or home and avoid some taxes? I?d like to use a portion of these proceeds to invest in other R.E.
Well, thanks for reading and I sure hope to get some advice. By the way anybody in central Florida has a good closing agent or R. E attorney and CPA for this transaction.