Fillable Form Lg-2 - Vermont Land Gains Tax Return (Page 4 of 5) in pdf

(or up to 25 acres if required by a local zoning ordinance),

legal fees, sales commissions, advertising costs and surveying

schedules A & B must be completed to calculate the seller’s tax

expenses that are directly connected with the sale of this parcel.

liability on the land greater than ten acres.

The amount of land gains tax reported on this return may not be

claimed as a selling expense. The total selling expenses for

6e Affordable Housing Exemption - An organization that

property that was held by the seller for less than one year may not

qualifies under section 501(c)(3) of the Internal Revenue Code and

exceed 12% of the selling price entered on Line 9.

also meets the “public support” test section 509(a)(2) of the Code and

also has as one of the stated purposes of the organization to provide

Line 12 - Itemize all capital costs of acquiring the land and land

affordable housing may qualify for one of two exemptions:

improvements (such as roads, sidewalks, sewer and water

systems). Attach an itemized list by description and cost. Also

1. If the land will be held by the organization for 6 years or

include the amount of any property transfer tax and legal fees paid

more following the sale, then only one-half of the tax

by the seller when the seller acquired the land.

otherwise imposed is due. If the organization does not

hold the land for at least 6 years, the organization is liable

Line 13 - Enter the capital cost of all structures, including both the

for the remainder of the tax.

cost of acquisition and the cost of subsequent improvements. Do

2. If the organization sells the land within 12 months of the

not include any personal property such as furniture. Do not

transfer to a buyer who qualifies under an affordable

include non-capital expenses such as taxes and interest unless

housing program and such buyer occupies a dwelling on

capitalized under IRC §266.

the land as the principal residence as required by

Line 16 - To determine the percentage that the seller’s gain bears

32 V.S.A. §10002(b), no tax is due on the transfer to the

to the seller’s basis, divide Line 15 by Line 14. If the result is not

organization.

However, if the organization fails to

a whole number, round up to the next highest whole number.

transfer the land within 12 months to a qualified buyer,

the organization is liable for the tax due on the original

Line 17 - If you are reporting the gain from the sale of land only (no

transfer and the transfer by the organization. Similarly, if

buildings), enter the amount shown on Line 15.

the land is transferred without a dwelling and a qualified

buyer fails to complete and occupy a principal dwelling

If the transfer includes a building, complete Schedule A and enter

within 2 years of purchase from the organization, the

the amount shown on Line 28. See instructions for Schedule A on

organization is liable for the tax on the first transfer and

page 33.

the buyer is liable for the tax on the subsequent transfer.

If an exemption from tax was claimed on Line 6, complete

Line 7 - Check the boxes that describe the transaction. If you

Schedule B and enter the amount shown on Line 35. See

check “other,” please explain.

instructions for Schedule B on page 33.

Line 8a - Enter the date the seller acquired the property that is

If the entire parcel is exempt from tax, enter zero.

being sold. If the seller tacked the holding period of another

person, enter the date the seller acquired the property on Line 8a

Line 18 - Enter the single flat rate of tax that applies to the

and enter the total holding period on Line 8c.

transaction, based on the seller’s holding period (Line 8c) and the

percentage which the seller’s gain bears to the seller’s basis (Line

Line 8b - Enter the month, day and year the seller transferred title

16), using the following table:

to the land. The transfer (but not the granting) of an option is

considered a transfer of title to land. The sale or exchange of

Years Land Held by

Gain, as a Percentage of Basis

shares in a corporation or other entity is also considered a transfer

Transferor (Line 8c)

(Line 16)

of title to land if it effectively entitles a purchaser to use or occupy

land.

In the case of a contract for deed, enter the date

0-99%

100-199%

200% or more

consideration first passed to the seller under the contract. A mere

promise to purchase land and payment of earnest money, or a

Less than 4 months

60%

70%

80%

deposit in escrow, to which the seller has no immediate right, does

4 months, but less than 8

35%

52.5%

70%

not constitute the passing of consideration.

8 months, but less than 1 year

30%

45%

60%

1 year, but less than 2

25%

37.5%

50%

Line 8c - Enter the period of time the property was held as

2 years, but less than 3

20%

30%

40%

determined under the Internal Revenue Code. A spouse who

3 years, but less than 4

15%

22.5%

30%

acquires property by reason of death or divorce may add to his or

4 years, but less than 5

10%

15%

20%

her holding period the period of time the property was held by the

5 years, but less than 6

7.5%

10%

other spouse or by both spouses. The holding period of one

spouse alone before the creation of a tenancy by the entirety may

Line 19 - Multiply Line 17 by Line 18 to determine the land gains

be added to the holding period of the tenancy by the entirety.

tax due. If the sale qualifies for the affordable housing exemption

as stated in the instructions for Line 6e, please remit one-half of

Line 9 - Enter the total sales price of both land and buildings. The

the tax due.

sales price includes all consideration paid or to be paid, including

the amount of any liens on the property that are not removed at the

Line 19a - If the buyer assumes a tax liability based upon a

time of transfer.

purchaser’s principal residence or builders exemption, calculate

the potential tax liability. If total acreage is 10 acres or less,

Line 10 - Itemize those selling expenses that may be used to

multiply Line 15 by Line 18. If the total acreage exceeds 10 and the

reduce the seller’s gain for federal income tax purposes, such as

transfer does not include a building, multiply Line 15 by Line 18

Form Lg-2 - Vermont Land Gains Tax Return Page 4

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