capital gains question

Paying for College
1

<p>OK a question</p>

<p>My dad gave me ($1) an acre of property a few years ago that is valued now at about 40K or so. He told me to sell it when my sons graduated from college to pay off any college debt I had borrowed to get them through school, or any student debt they had if I didn't have any.</p>

<p>Now that the boys are seniors next year and all my fafsa's and profiles are done I am thinking of listing the property to pay off the 6k debt of parent loans I took on and the 17K of student loans or so each boy will have. Based on the properties location I think it will sell quickly.</p>

<p>Given that my tax bracket is above 15% and I have owned the property for 4 years or so I think it will be considered a long term investment and I will be taxed at a flat 15% if I sell it this year. Is that correct?</p>

<p>I will call the IRS as well and see an accountant before pulling the trigger but thought I would run it by here.</p>

<p>input is appreciated</p>

2

<p>For 2010 the capital gains rate remains at 15% but that will expire at the end of the year unless extended. This would probably be a good time to sell it, just in case.</p>

<p>Also, you won’t be taxed on the entire sales price, but only on the difference between what you sell it for and your basis in it. Since it was a gift, your basis would be the same as your father’s. In other words…what he paid for it.</p>

3

<p>If you own land in an area where things are selling well in this economy, it may have much more value to your kids to let them hold it and pay off those small loans, especially if they are subsidized.</p>

4

<p>If you own land in an area where things are selling well in this economy, it may have much more value to your kids to let them hold it and pay off those small loans, especially if they are subsidized.</p>