I have 15 acres of land in NM I am considering selling. I have owned them for 18 mos. I bought the land for 15K and hope to sell for 45K. Will I owe capital gains and if so, how much?
by 
Vero
ANSWERS: 2
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The rule for land is different than if it were your residence. If the property was your prime residence and you lived there for two years you more than likely would pay no capital gains. If it is just land and you sell it you will get a 1099 form and if your profit is 30K put aside a minimum of 25% for the tax you will have to pay. It stinks because you bought it and deserve to keep it all, however the Government wants thier share of your profit and I think it is terrible, but yes, if you get the 1099 which you probably will you must pay and it could go as high as 35% of sales profit. If you do not get a 1099 I personally would not say anything and move on. But remember this, Ignorance of the law is no excuse, pay now or you just might pay more later if it catches up to you down the road, good luck!
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If you are planning on reinvesting the proceeds from the sale of that land to purchase another investment property, you should look into doing a 1031 exchange (Section 1031 tax deferred exchange). Section 1031 of the IRS Tax Code allows you to defer the capital gains tax on income, investment, and/or business property when you use the proceeds from the sale of the property to purcahse another investment property. You should contact a 1031 professional, known as Qualified Intermediaries, if you want more information on this - www.1031taxinfo.com has great information on 1031 exchanges as well.
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