Taxes on sale of part of a property?

I bought land and a house 10 years ago. Someone wants to buy most of the land, but not the house at a price rather higher than I paid for the whole property. (that probably won't surprise most of you, but around here property hasn't gone up in value for about 15 years)

How do I handle taxes on it? It is a reasonably unique property (as I found out when I tried to contest the assessment a few years ago. My lawyer contacted the best appraiser in the area who said he didn't want to take my money when he couldn't give me a meaningful appraisal.) so it is just a wild guess what the remaining property is worth. Likewise, it would just be a wild guess as to what the two parcels were worth 10 years ago.

I suppose the IRS wouldn't be in any better position.

Reply to
jack
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The original purchase price will have to be allocated among the two parcels of land and the house. I suggest using real estate assessments from 10 years ago to get the relative proportions.

Your gain, reported on Schedule D, will be net proceeds less allocated basis.

Reply to
Bill Brown

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