Did you know that land held for investment is treated as a capital asset for tax purposes?

When sold, the gain or loss falls under capital gains taxation:
Short-term gains (held ≤1 year) are taxed at ordinary income rates.
Long-term gains (held >1 year) enjoy reduced tax rates (0%, 15%, or 20%, depending on income).

The land’s basis includes its purchase price and acquisition costs, with possible adjustments for improvements. Capital gains and losses must be reported on Schedule D (Form 1040) and Form 8949 to ensure compliance.

Need more clarity on investment tax rules?

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