Purchasing / Selling Land

[TimberGhost]

Hope everyone’s season has been a good one . Just have a few questions regarding selling and buying of recreational land . I have a camp in Herkimer that I have considered selling for some time but I think this year will be it. 
1) how does capital gains tax work and what is time allowed to repurchase before getting hit? 
2) Can you purchase something prior to selling and than apply the money from sale towards new mortgage to avoid taxes ? 
3) what is the rate of tax 

4) Anyone know the route of county auctions ?? Looking in southern tier in around 81 corridor .

Being from NJ ,I’m trying to gauge my route in new year. I will obviously contact my accountant but figured if someone has had any experience I’d love to here it .

[mowin]

9 minutes ago, TimberGhost said:

Hope everyone’s season has been a good one . Just have a few questions regarding selling and buying of recreational land . I have a camp in Herkimer that I have considered selling for some time but I think this year will be it. 
1) how does capital gains tax work and what is time allowed to repurchase before getting hit? 
2) Can you purchase something prior to selling and than apply the money from sale towards new mortgage to avoid taxes ? 
3) what is the rate of tax 

4) Anyone know the route of county auctions ?? Looking in southern tier in around 81 corridor .

Being from NJ ,I’m trying to gauge my route in new year. I will obviously contact my accountant but figured if someone has had any experience I’d love to here it .

I'd contact a realtor and a real estate lawyer in your area. 

[ZAG]

28 minutes ago, TimberGhost said:

Hope everyone’s season has been a good one . Just have a few questions regarding selling and buying of recreational land . I have a camp in Herkimer that I have considered selling for some time but I think this year will be it. 
1) how does capital gains tax work and what is time allowed to repurchase before getting hit? 
2) Can you purchase something prior to selling and than apply the money from sale towards new mortgage to avoid taxes ? 
3) what is the rate of tax 

4) Anyone know the route of county auctions ?? Looking in southern tier in around 81 corridor .

Being from NJ ,I’m trying to gauge my route in new year. I will obviously contact my accountant but figured if someone has had any experience I’d love to here it .

I believe after 2yrs of ownership there is no cap gains. Per the convo I had with my accountant a few weeks back.

[GreeneHunter]

Inheritance Tax .... anybody ?

[SportsmanNH]

27 minutes ago, ZAG said:

I believe after 2yrs of ownership there is no cap gains. Per the convo I had with my accountant a few weeks back.

Zag  the 2 yrs your acc is referring to is your primary home  and not investment property . A single person doesn't have to pay capital gains on the 1st $250k of profit selling their residence and a married couple is the 1st 500k . There are also other write offs that can be added such as home improvements that can justify a higher capital gains advantage .   Say you bought a house for $300k and then built additions on , finished the basement , new cabinets etc that cost 200k . After 2 yrs you sold the house for 1 million . You would not be taxed on the basis of 300k purchase and 1 million sale price to a profit of 700k . The profit would be 500k .  Its covered under the IRS code 121 .  

What Timber is looking at is covered under IRS Code 1031 for investment property . 

[SportsmanNH]

1 hour ago, TimberGhost said:

Hope everyone’s season has been a good one . Just have a few questions regarding selling and buying of recreational land . I have a camp in Herkimer that I have considered selling for some time but I think this year will be it. 
1) how does capital gains tax work and what is time allowed to repurchase before getting hit? 
2) Can you purchase something prior to selling and than apply the money from sale towards new mortgage to avoid taxes ? 
3) what is the rate of tax 

4) Anyone know the route of county auctions ?? Looking in southern tier in around 81 corridor .

Being from NJ ,I’m trying to gauge my route in new year. I will obviously contact my accountant but figured if someone has had any experience I’d love to here it .

T G  as a real estate investor ,  the best advice I can give you is consult with your accountant and attorney . The Like Kind exchange you mention is called IRS Code 1031 for investment property . I have no idea how your accountant has handled  your property from purchase to expenses while you own it.  As a 2nd home , investment property , rental property ? . Did they deduct depreciation , repairs , taxes  ?   The IRS Code 1031 handles them differently . But the good news is can do an exchange within certain time limitations . This link provides some insight but in general . Only the professionals handling your specific situation can give you the best advice.

https://smartasset.com/taxes/avoid-capital-gains-taxes-on-land-sale

[Moog5050]

59 minutes ago, GreeneHunter said:

Inheritance Tax .... anybody ?

No such thing in NY.  Only Estate tax if estate exceeds lifetime credit.  6.9mm in 2024.  

[TimberGhost]

Thank You all for the Advise 👍

I’ll definitely be contacting my accountant.  As a non resident (NJ Res) and secondary property owner just wanted to know if anyone had a similar situation. My accountant mentioned I have 6 months to utilize the sale money before I get taxed on net profit (less  initial purchase price plus improvements is what you get taxed on ) this is what I was told 4 years ago … Gonna list it in spring and see what happens 

Happy Holidays All