Selling a rental property means unwinding years of depreciation. Selling raw land is simpler, since there's no depreciation to recapture, but the basic question is the same one people still get wrong: what's your actual gain, and how is it taxed.
The math itself
Your taxable gain is the sale price minus your basis: generally what you paid for the land, plus certain qualifying improvements (things like clearing, grading, or a well or septic system, not routine maintenance). People consistently understate their basis because they never kept records of what they put into the property beyond the purchase price, which means overstating the gain and overpaying.
Why the holding period matters
Land held more than a year before selling qualifies for long-term capital gains rates. Sell sooner than that, and the gain is taxed as ordinary income instead, often at a meaningfully higher rate. If you're close to that one-year mark, the closing date can matter more than people expect.
The option a lot of owners don't know they have
If you're selling investment or business-use land with the intent to reinvest in more real estate, a 1031 exchange can defer the gain entirely, but it comes with strict timelines that start the moment the sale closes, not whenever you get around to thinking about it.
If you're sitting on land you're considering selling, it's worth a conversation before it goes under contract, so the basis and the timing both get handled correctly the first time.
This post is general information, not specific tax, accounting, or legal advice. Your situation may differ, so talk to us before acting on anything here.