I have a question regarding the Capital Gains tax I will have to pay on the sale on my vacant hunting land I sold in Michigan in 2016. I owned the property for six years and from what I have researched I will will owe 15% because I owned the property longer than one year. I purchased the property for $28,500 and sold for $68,000.

What are the tax implications of selling vacant land?

My annual income is under $40k and my wife’s income is $90k. We have one dependent. The land was purchased by me solely during my previous marriage and I married my current wife last year May 31, 2019 5:44 PM It depends. You will have a capital gain of $30K from the sale.

What’s the tax rate on a capital gain?

The rate at which that capital gain will be taxed depends on your filing status. If you file jointly, you will owe capital gains tax at 15% of the gain. If you file separately, it is possible that your capital gains rate will be 0% (capital gains rate is 0% for taxable income under $37,650 if you file separately).

How are capital gains taxed if you file separately?

If you file jointly, you will owe capital gains tax at 15% of the gain. If you file separately, it is possible that your capital gains rate will be 0% (capital gains rate is 0% for taxable income under $37,650 if you file separately). However, there are other issues with filing separately that might make it better to file jointly regardless.

How is capital gain tax on sale of land calculated?

In the case of STCG, the profits generated in the process of selling land is included in the taxable income of the owner and he/she has to pay taxes depending on the income tax slab they fall in for that particular financial year. For LTCG, the current tax rate is 20%.

Do you have to pay capital gains tax on 8.8 acres?

You would, however, have to pay capital gains tax on the appreciated value of the remaining 8.8 acres. Now, the CRA has said that you can get apply for a tax exemption on parcels of land that are greater than 1.2 acres, but you will need to prove to that the additional land was required for your use and enjoyment of the property.