I have a situation where a client purchased a section of land, and immediately sold off 1/2 of it. I have capitalized the legal fees on the purchase side of it, but what happens with the legal fees on the sale side? Are those legal fees 100% expensed, or do I deduct them from the value of the remaining 1/2 section?
ADMIN RESPONSE
Feb 10, 2025
Hi Cheryl!
The legal fees on the sale are used to reduce the ACB of the land that was sold. The capital gain/loss would be calculated as Proceeds of Disposition - Original Cost of Land (ACB) - Outlays & Expenses.
