land Was purchased for $62,000 in 1998.upon divorce in 2003 land was valued at $220,000 which half total was paid to x-wife.now land is valued at $700,000 how much capital gains tax will I pay if I sell?
Assets acquired as part of a family law financial settlement are generally deemed to be acquired at the value the disposing person acquired the asset for. There is no capital gains tax event at the time of the financial settlement. Specifically in your circumstance 50% of the land was acquired by you in 1998 for $31k, and the second 50% (part of your financial settlement) is deemed to be acquired by you for $31k too. At the time you did your financial settlement there should have been an allowance for capital gains tax that would be payable in the future by you.
Given it is land, your cost base (for CGT) is your purchase price $62k plus holding costs since acquired eg. rates interest repairs etc
There may be other relevant factors such as other capital losses you might have.
I wish you all the best.
As David said you would be facing a significant capital gains tax bill if you sell now. I would recommend you visit a good accountant and find out what would be the outcome if you build on the block and move into it for at least 12 months? I don’t know your situation or the details of the CGT law in your case but it is worth looking at all of your options.
If you would like some contacts, I will be very happy to assist