Q: I have gone through several books including yours and have found nothing that pertains to my situation. We are home owners who got lucky, nine years ago my wife and I bought a house on slightly more than 2 acres and last summer we were able to subdivide and sell 1 acre. We still live in our house on the balance of the property. If I may be so bold as to ask, what do you think our tax implications are? I have asked attorneys/accountants but their answers always sound so tentative. Looking forward to hearing from you.
A: I ran your question by my real estate attorney expert. He says what you’re asking is too vague, which is why the answers you’re getting from attorneys/accountants may sound tentative to you.
I think you need to sit down with all of the numbers and go through them with your CPA to see what is available to you. My best guess is that you can treat the acre like a long-term capital gain and pay 20 percent tax on your profits. But it’s only a guess.
Jan. 1, 2004.