All Forum Posts by: Carter Knapp

Thanks for the reply Robert. I looked into "Cost Basis" on the IRS website and the rule is that you can assign a reasonable value to the smaller parcel based off of the percentage of acreage of the entire property. So the 6 acres would have a cost basis of around 18k and  the larger parcel 62k. That is not necessarily accurate though, as a smaller parcel is usually worth more per acre. I wasnt able to find any information on if you are able to adjust the value of divided parcels however. Here is the link to the IRS website https://www.irs.gov/publicatio...

I purchased 26 acres of vacant hunting/forest land in northern WI 6 months ago. The property is divided into a 6 acre parcel and a 20 acre parcel, and I plan to sell the 6 acre parcel first. Lets say I purchased the entire parcel for 80k, and I sell the 6 acre parcel for 30k within one year of owning the entire parcel. Do i have to pay short term capital gains tax on that 30k if i sell the other 20 acres for 70k after more than a year of owning it? Sorry if my question is confising...