*Loan,banking and credit>>>tax advice

Need advice on the tax consequences of selling inhereited land?

I am selling a portion of my inherited property for $35,000. I make $41,000 per year and receive no child support. I have two minor children. Does anyone know approx what percentage of taxes I will have to pay?

First of all, it depends on when you inherited it and when you are selling it.

Your "basis" in the property is what it was worth at the time of the death of the person you inherited it from.

If that was a while ago, the property may have increased in value. If it was recently, or in an area not experiencing increased value since you inherited, it may be at or near the same value as your "basis" at the time of their death.

The difference between your "basis" and the current sales price of the property is called the "capital gain" and it is all that you will be taxed on.

EXAMPLES

If value @ death was $35,000.00 and you are selling for $35,000.00 - NO TAX (no gain because the basis is as same as the sales price)

If value @ death was $25,000.00 and you are selling for $35,000.00 - $10,000 Taxable Capital Gain

As for the tax rates, that is where my expertise pretty much ends.

There are Long Term Capital Gains and Short Term Capital Gains, and I do not know the length of time for each, nor whether or not there is a difference because the property was inherited and not purchased. They are taxed at different rates, and those rates have nothing to do with your income level or any other particulars other than the time the capital asset (the property) was held by you.

For this you will need to speak to an accountant or tax advisor, but I hope you have a better understanding now of what questions to ask to get a complete answer from them.

Good luck and take care.

I think that varies per state. Maybe if you edit your question to include the state you live in, we can help. =)
You will first have to determine the basis for your property. If you inherited it it should be the value when you got it. If it was a gift it will be the former owners basis.

It is the difference between the sale and the basis that you have to pay capital gains taxes on based on your bracket.

You will probably be in the 25% bracket (starts at $30k), but that is only on the gains. So if the basis is $30k and you sell for $35k, you pay 25% of the $5k or $1250.

Hope that helps
http://www.extension.umn.edu/distributio...
http://www.moneychimp.com/features/tax_b...