Submitted By: someone
Answered: May 3, 2021 11:03 pm

I sold some vacant land that was part of my principal residence. As a result, I had to repay a home equity loan. Is this a capital loss?

You may have a capital gain on the sale of land adjacent to your home. Whether or not a mortgage is involved does not impact gain or loss for federal income tax purposes. However, you may be able to use the home sale exclusion (which is up to $500,000, or $250,000 for singles) for gain on the vacant land adjacent to your home if the sale of the vacant land and the sale of your home occurred within 2 years of each other.

Tax Glossary

Amortization of intangibles

Writing off an investment in intangible assets over the projected life of the assets.

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