We bought a lot in a development called Vintage Oaks, in New Braunfels. Our plan was to build a house and flip. My partner was the builder. He up and decided to move to Italy. Is a loss on unimproved dirt tax deductible? I don't recall having to designate if it was for an investment. We've had the lot 16 months.
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Bought a lot in New Braunfels that I'm taking a $15k loss on
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Last: 2 yr ago by AggieJames09
I would absolutely take that as a loss on investment property but I'm no CPA.
If my cpa didn't want to let me take that I'd be looking for a new cpa
If my cpa didn't want to let me take that I'd be looking for a new cpa
A very uninformed response. Wow. If your tax preparer advises you against something that may be illegal, you'll bolt to a new preparer? You do know that the tax return is YOURS, not the preparer's, right?
It truly was for an investment property to flip.
Maybe my response was a little rash. I apologize.
I think it would have been better if I had said I would expect a very detailed answer from my CPA if I wasn't able to take that loss.
I'll work to do better before I hit send.
I think it would have been better if I had said I would expect a very detailed answer from my CPA if I wasn't able to take that loss.
I'll work to do better before I hit send.
Yes, it is a capital loss, short-term or long-term depending on how long you owned it. Can offset any capital gains and with the loss and up to $3,000 per year over and above the gains, if any.
Thanks so much
so you didn't know the answer, you just want to call out nactownag?Aggiemike96 said:
A very uninformed response. Wow. If your tax preparer advises you against something that may be illegal, you'll bolt to a new preparer? You do know that the tax return is YOURS, not the preparer's, right?
wow.
Yes, its a short term or long term capital loss. and may require some of the loss to be carried over to the next year.
Assumimg you haven't expensed them already and this is truly an investment property, look into capitalizing your paid property taxes under Section 266. Creates more of a paper loss for you to offset future capital gains.
https://somersetcpas.com/section-266-election-for-investment-property/
https://somersetcpas.com/section-266-election-for-investment-property/
Nac is as good of an Aggie/friend as they come. I trust him emphatically. Thanks for the input buddy.
It's not clear that you've sold the lot from your description, but I hope that's what you meant by "taking the loss on."
Yep. Closing is this week.
Speaking as a guy who's bought "can't miss" land, held it for 10 years, and then was happy I unloaded it for exactly what I paid, I feel your pain.Quote:
Bought a lot in New Braunfels that I'm taking a $15k loss on
I'm curious, if you can share. I would have thought land investment in the New Braunfels area would also have been "can't miss" given the crazy real-estate land price appreciation we've experienced in many parts of Texas.
So, what do you think happened to make your price go down? Or is the loss due to expenses you incurred preparing to build on it?
I think Vintage Oaks is a Blue Green development community or something similar to them. They make a strong and hard push to sell lots, lots, lots, like they are cars, but actual building activity is very slow to takeoff. Not to mention the main developer has more phases so they continue to supply "new" lots when others are trying to resell them. A local example is King Oaks - Takes a long time to mature as a housing development. That's my take.
Dp
Ribeye-Rare said:Speaking as a guy who's bought "can't miss" land, held it for 10 years, and then was happy I unloaded it for exactly what I paid, I feel your pain.Quote:
Bought a lot in New Braunfels that I'm taking a $15k loss on
I'm curious, if you can share. I would have thought land investment in the New Braunfels area would also have been "can't miss" given the crazy real-estate land price appreciation we've experienced in many parts of Texas.
So, what do you think happened to make your price go down? Or is the loss due to expenses you incurred preparing to build on it?
The lot has a great view but the view comes with a slope. I had reservations about the lot because of the increased cost of concrete but my "partner" convinced me since we were splitting the profits it wasn't a big deal. Then he decided to move to Italy. I'm just glad he didn't start the job and then bail on me. Actual loss is going to be around $7,500 so not too painful. So higher interest rates and concrete hurt the property value.
CPA here
If you are in "investor", its a capital loss. You can use it to offset capital gains, until used up, but the most capital loss you can take in a year is $3000
If you are in the business of developing, you can take it as a sale and cost of goods sold on your schedule C. that will allow you to take all the loss in 2023, but I would only do that if you were in the business of developing real estate.
Hope that helps!
If you are in "investor", its a capital loss. You can use it to offset capital gains, until used up, but the most capital loss you can take in a year is $3000
If you are in the business of developing, you can take it as a sale and cost of goods sold on your schedule C. that will allow you to take all the loss in 2023, but I would only do that if you were in the business of developing real estate.
Hope that helps!
Canyon Lake prices increased 60% from 2019-2022. But prices have decreased about 10% over the past 12 months. NB/CL prices will fluctuate but likely to remain a hot market. Why not just hold the property for 3-5 years to see what happens?
I'm trying to sell my CL house now, and it looks like a sea of green (for sale), with virtually nothing getting actually bought. Crap. We are resigned to waiting it out a few years.
Reload - I own a lot in VO but haven't built yet. Waiting for construction prices to moderate. I just appealed my Comal Co tax assessment because I believe they aren't reflecting the recent retreat of lot and home values. It is hard to find data on lot sales so if I could be so bold to ask, would you be willing to share some basics (address, price per ac, etc)?
If so please reach out at jattamc91 (at] gmail. Thanks
If so please reach out at jattamc91 (at] gmail. Thanks
Sure. I'll shoot you some info this evening.
Reload - still interested in hearing from you about any details you'd be willing to share. TIA
Jattamc91 (at] gmail.com
Jattamc91 (at] gmail.com
We closed yesterday. Email sent
Just keep in mind they're giving you a value as of 12/31/2022, so they'll likely ignore 2023 values.
Good luck - I had nothing but pain with comal county last year.
Good luck - I had nothing but pain with comal county last year.
I bought my vintage oak lot 6 years ago, wish I would have bought twenty of them back then.
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