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    2296867481's Avatar
    2296867481 Posts: 1, Reputation: 1
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    #1

    May 22, 2008, 02:19 PM
    Capital Gains
    I inherited land from a family member that passed away. I have sold the land. To avoid paying capital gains can I just go out and buy some investment property with the money I made?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    May 22, 2008, 03:12 PM
    Negative.

    In order to avoid such capital gains, you would have to do a 1031 exchange, but it is too late for that, because you have already sold the land.

    You are stuck! Just pay the capital gains taxes.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
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    #3

    May 22, 2008, 06:09 PM
    Quote Originally Posted by 2296867481
    i inherited land from a family member that passed away. i have sold the land. to avoid paying capital gains can i just go out and buy some investment property with the money i made?
    The cost basis of the land you inherited is the fair market value at the date of death, and not the original cost of the family member. Also any gain of this property is long term capital gain even if you sell the property only a day after the date of death.

    Read: Your U.S. Tax Return: Tax on Inheritances
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