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Old 02-08-2017, 08:38 PM
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Selling vacation property.

In approx. 1996 my wife and I purchased some bare land at a local lake for 8500.00.

We had a septic system and water installed for 1800.00.
Installing electric set us back 500 bucks.
We moved a mobile home we had previously purchased for 5,000 onto the land at a cost of 900.00
We put in a front and rear deck/porch for about 2100.00
Had a gravel driveway and a ravine filled in for 700.00

Sadly we kept no receipts for any of this.

We are now selling the property.

What is the basis value of the property for tax purposes?

Thanks for your time...



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Old 02-09-2017, 07:54 PM
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Posts: 4,650
Quote:
Originally Posted by Diogenes View Post
In approx. 1996 my wife and I purchased some bare land at a local lake for 8500.00.

We had a septic system and water installed for 1800.00.
Installing electric set us back 500 bucks.
We moved a mobile home we had previously purchased for 5,000 onto the land at a cost of 900.00
We put in a front and rear deck/porch for about 2100.00
Had a gravel driveway and a ravine filled in for 700.00

Sadly we kept no receipts for any of this.

We are now selling the property.

What is the basis value of the property for tax purposes?

Thanks for your time...
Basis is the amount your home (or other property) is worth for tax purposes. When you sell your home, your gain (profit) or loss for tax purposes is determined by subtracting its adjusted basis on the date of sale from the sales price (plus sales expenses, such as real estate commissions). The larger your basis, the smaller your profit will be, reducing your tax liability. If you sell your home for less than its basis, you'll have a loss. However, losses incurred on the sale of a personal residence are not deductible. One confusing thing about basis is that it can change over time. When this occurs, your basis is called "adjusted basis." To determine the amount of your basis, you begin with your starting basis and then add or subtract any required adjustments. Since you?ve purchased your home, your starting point for determining the property?s basis is what you paid for it, 8500; If you buy property and take over an existing mortgage, you use the amount you pay for the property, plus the amount that still must be paid on the mortgage. Say you J buys your home for $60k cash and assumes a mortgage of $240k on it. The starting point for determining her basis is $300k. Certain fees and other expenses you pay when you buy a home are added to your basis in the property. Most of these costs should be listed on the closing statement you receive after escrow on your property closes. However, some may not be listed there, so be sure to check your records to see if you?ve made any other payments that should be added to your property?s basis. Your starting basis in your home must be reduced by any items that represent a return of your cost. These include:depreciation allowed or allowable if you used part of your home for business or rental purposes; the amount of any insurance or other payments you receive as the result of a casualty or theft loss;any deductible casualty loss not covered by insurance, and any amount you receive for granting an easement. so your basis is 8500 + book value of your septic system minus $500 of refund + book value of the electrical system+ mobile home purchase price of 5000 +book value of deck/porch +book value of gravel driveway so on??



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