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

then subtract the amount on Line 19. If the total acreage exceeds

Line 31 - If the entire property is used for exempt purposes, enter

10 and the transfer includes a building, multiply Line 28 by Line 18

100%. If a portion of the property is used for nonexempt purposes,

then subtract the amount on Line 19. Enter this amount on Line 8

i.e.; commercial use, enter the percentage used for exempt

Form LG-1.

purposes.

Line 20 - To qualify as an installment sale, the land must have

If the property is used in part for nonexempt purposes, enter the

been held by the seller for at least one year; the total land gains tax

percentage of area used for exempt purposes. For example, if a

liability reported on Line 19 must exceed $2,000; and the

five-unit apartment building is sold with ten acres of land and 1/5

payments must be made directly to the seller in installments after

of the building will be occupied by the buyer as a principal

the date of closing. A sale financed by a mortgage, deed of trust,

residence, the buyer may claim exemption for 1/5 of the ten acres

or other financing arrangement in which the seller is paid in full on

that would otherwise qualify for exemption. In this case, the seller

the date of closing is not an installment sale.

should enter “10" on Lines 29 and 30, “20%” on Line 31 and “2" on

Line 32.

If the sale qualifies as an installment sale, a separate Land Gains

Tax Return is required for each payment, including amounts paid

If the property is used only for exempt purposes without an existing

at closing. On Line 20a, enter the amount of this principal

building and the entire acreage qualifies for exemption, you are

payment. If this is the first Land Gains Tax Return filed for this sale,

not required to complete Lines 32 through 34. Skip to Line 35 and

attach a copy of the promissory note or other documentation

enter zero.

establishing the dates and amounts of payments.

Schedule C - If this is the sale of timber, timber rights or they were

Line 21 - Enter the amount of tax withheld by the buyer and

previously sold, you must include any gain or loss on the sale of

remitted to the Department. If the seller obtained advance

the timber or timber rights when figuring your land gains tax. The

certification from the Commissioner of Taxes, enter the amount of

prior sale of timber or timber rights becomes taxable if the

land gains tax paid in advance of the sale.

underlying land is sold within six years of purchase. This rule shall

apply if the underlying land is or was part of more than 300 acres

of contiguous land owned by the same taxpayer. If the land is

subject to and in compliance with a forest management plan

approved under 32 V.S.A. §3755(b) or 10 V.S.A. §2623(2), the

timber or timber rights is not taxable. If the timber is taxable

complete this schedule. Please complete Lines 9-15 prior to the

NOTE: Do not complete Schedule A or Schedule B if you

completion of this schedule then add Line 37, Basis of Timber/

reported a loss on Line 15.

Timber Rights to Line 14. Add the result from Line 38 to Line 15

Schedule A - Complete this schedule if the transfer includes a

and recompute Line 16, Gain as a Percentage of Basis.

building.

Line 24 - Enter the fair market value of the land at the time of

transfer. You may allocate gain between land and buildings using:

1) Percentages on municipal listers card. Divide the listed value of

Note: Residents, Part-Year Residents, and Nonresidents - If

the land plus improvements (e.g.; septic system or well) by the

the sale of property resulted in a gain which was included in

listed value of the land improvements and buildings. Multiply the

your Federal Adjusted Gross Income, a Vermont Income Tax

result by the total sale price on Line 9, and enter the portion of the

Return must be filed and income tax paid on that gain. If the

sale price attributable to the land on Line 24. Attach a separate

seller was a nonresident at the time of the sale, the buyer must

sheet showing computation. 2) A qualified appraisal. Attach a

withhold 2.5% of the consideration paid for the transfer and

copy of the appraisal. 3) The percentages specified in Technical

remit it with Form RW-171 within 30 days of the transfer. If the

Bulletin 34 found on our web site at

buyer fails to withhold this amount, the buyer will be

personally liable for the amount required to be withheld. See

Alternatively, you may allocate amount realized between building

instructions on Form RW-171 or Form PT-172.

and land. See Technical Bulletin 34 for more information on how

to use this method.

Schedule B - Complete this schedule if an exemption was claimed

on Line 6 and any portion of the transfer is not exempt.

Line 30 - Enter the maximum number of acres or square feet for

which an exemption may be claimed. In general, no more than ten

acres of land qualify for the purchaser’s or seller’s principal

residence exemption or the builder’s exemption. If local zoning

requires more than ten acres for residential property, the minimum

acreage specified in the ordinance may be exempted, up to a

maximum of 25 acres. There is no ceiling on the number of acres

that may be claimed for the agricultural exemption in box 1. Box

2 is limited to 25 acres.

Form Lg-2 - Vermont Land Gains Tax Return Page 5

Related Articles

Related forms

Related Categories