Short term gain or long term gain?

What happens if there are multiple parts to my basis? For example: suppose I bought some vacant vacation land three years ago. Five months ago I hired someone to build my vacation home. It's finished. After one month, I've decided I don't like it. So I sell it and make a profit. I am not in the business of building houses.
I've owned the land for several years, but the house for only a month.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
It seems to me that figuring out how to allocate the selling price between the house and the land would be equally important in determining how to tax the gains. Like, the short-term capital gain on zero gain is ... zero.
Has the house had any realistic opportunity to appreciate?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 10/9/2017 10:05 AM, NadCixelsyd wrote:

Well the easy part is the cost basis of the land and the cost basis of the improvement. The hard part is the sale proceeds for the land vs the sale proceeds for the improvement when the contract does not provide it. You could research the value of a comparable piece of land you could buy to build a house on. Or, if the county is using market prices in their tax assessment, you could that relationship o land to building to make the determination.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

BeanSmart.com is a site by and for consumers of financial services and advice. We are not affiliated with any of the banks, financial services or software manufacturers discussed here. All logos and trade names are the property of their respective owners.

Tax and financial advice you come across on this site is freely given by your peers and professionals on their own time and out of the kindness of their hearts. We can guarantee neither accuracy of such advice nor its applicability for your situation. Simply put, you are fully responsible for the results of using information from this site in real life situations.