Many non-financial assets lose value. Cars, furniture and similar assets are likely to lose value over time and are generally not subject to capital gains tax. However, there could also be exceptions, akin to collector cars, jewelry, artworks or antiques. You might have to report a capital gain from the sale of a private property that has increased in value.
There are three rules for calculating capital gain or loss:
- If the adjusted cost basis (ACB) is lower than $1,000, the ACB is taken into account to be $1,000.
- If the sales proceeds are lower than $1,000, the proceeds are considered to be $1,000.
- If each are lower than $1,000, there may be nothing to report.
Capital gains from personal property
Because of those three rules, assets for private use are generally secure for tax purposes. In rare cases where a taxpayer makes a profit, the amounts should be within the hundreds for it to matter.
Interestingly, when someone purchases a burial plot, they are literally purchasing the appropriate to bury or interment someone on the property. That is, the client becomes the “burial rights holder” but doesn’t own the land itself. Nevertheless, the empty cemetery plot has value to another person who inherits or purchases it.
When the deceased died, it was understood that they sold all their assets, Brian. This also includes the cemetery property. Therefore, capital gains tax would must be paid on any increase in value upon their death.
If you, as executor, sell the property shortly thereafter, the worth will likely be similar. If a gain is made between the time of death and the sale of the property, this might lead to a capital gain for the estate.
Sale of a cemetery plot as a part of a settlement
It’s price noting, Brian, that there could also be some restrictions on selling the cemetery property. Remember that the land will not be owned. The owner has the appropriate to be buried there. And the cemetery may or may not allow private sales of burial rights.
Because the property has value, it may be subject to inheritance or estate administration tax, like several other property that passes through the deceased’s estate. You should speak to the cemetery man, Brian, in regards to the rules for selling the land rights. And consider the tax and inheritance implications of the person’s death and the following sale of their vacant cemetery plot.
