How to record sale of Air Rights

JOEPCPA · ‎09-13-2022

If a client sells air rights above their building, is that a capital gain or ordinary income?

If capital gain, is basis zero?

Thanks, Joe

Terry53029 · ‎09-13-2022

I would think it is an asset, and therefore subject to capital gain/loss. As far as basis it would be what he paid for said air rights, Probable zero basis

View solution in original post

JOEPCPA · ‎09-13-2022

Thanks much

BobKamman · ‎09-13-2022

On the other hand, most of what he paid for the entire property might be allocated to the air rights. If you want 27 pages instead of two sentences, check this out:

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://scholar.smu.edu/cgi/viewcontent.cgi?article=2329&context=jalc

JOEPCPA · ‎09-21-2022

Thank you!