I may be a little confused, jumping in after a long day, but I don't have a clear picture on how the land came in your possession.If the land was purchased at $160,000 and was gifted to you and your spouse over the course of several years, the net result is that you will have received the giver's basis of $160,000 and the giver's holding period. Therefore, the long-term capital gains would be at most 15% of the gains = 15% of $630,000 (the $790,000 selling price minus the $160,000 purchase price) = $94,500 in long-term capital gains taxes.If you had, on the other hand, inherited the land, I would think you would have the step-up basis of the land as of the day of evaluation (usually the fair market value as of the day the person died), so the gains would be even less.There is also a complication of if the land was jointly held and then one of the owners died, leaving half the land to be inherited by the surviving party.As you can imagine, there can be a lot of devils in the details.And all this is ignoring the effects of state taxes.
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