Weird Real Estate Tax Issue...HELP!!!

[Kyle Herzog]

I have an odd real estate issue I need tax advice on. I purchased a lot on which I’m currently building my home in May 2018. After we started building we found that our neighbor’s house was 3 ft away from their lot line and they needed to buy 7 ft of our land to meet the city mandated 10 ft setback. We ended up selling them this land for ~$13k and it was originally purchased by us for ~$3k (based on what we paid per square foot for the lot). Therefore, we made a “profit” of $10k and I’m curious how I can avoid paying short term capital gains taxes on this land. We didn’t intend to buy and sell so quickly, and we sold it for what we did because losing the 7ft of land changed our house plans and essentially, we are making no profit. Any advice on what we can do to avoid paying the 30%+ short term capital gains tax on this land sale?