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I bought a house last year, which included an (empty) above-ground pool. I didn't want the pool so I sold it to someone else.

Does this sale likely count as capital gains for tax purposes? (And probably short-term capital gains, since I sold it a couple of months after buying the house.)

If so, I suppose I could calculate some basis for it based on a fraction of the purchase price of my house, and then would need to account for that if/when I sold the house. I could also just "keep" all the basis with the property itself and put $0 for the sale of the pool. Or is there a different or more correct way to structure things?

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    Is the pool attached to the ground underneath in some way? If not, how is it different from a bike standing on the driveway which you could sell to anyone without concerning yourself in the least about capital gains etc? Jan 30, 2022 at 19:49
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    @DilipSarwate If you sell a bike for more than its cost, you do owe capital gains tax.
    – nanoman
    Jan 30, 2022 at 22:11
  • I find it kind of funny that you point out the pool was "(empty)". Are you thinking about the price of the water here? ;)
    – TTT
    Jan 30, 2022 at 23:02
  • @TTT No I'm not. I wanted to emphasize that, at time of sale, this was just an object of value on the property. Jan 31, 2022 at 4:15
  • @DilipSarwate not attached to the ground, it rests on the ground. But Nanoman's point applies, whether it's attached to the ground or not doesn't change the fact that it has value and may be subject to taxes. Jan 31, 2022 at 4:16

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Generally, above ground pools do not affect home values for appraisal or tax assessment purposes. Note that inground pools generally do increase home values, typically in the 5-8% range. That being said...

Scenario 1: Suppose when you purchased your home, that you negotiated with the seller that you would pay $500 more for the above ground pool. Further suppose you sold said pool for $800. Technically, your home value's basis should have been $500 lower, and you would have $300 in income in the year you sold the pool.

Scenario 2: Suppose when you negotiated the sale of the house, the seller said you can have the above ground pool for free, if you want it. (In other words, if you said you didn't want it, the seller would have removed it before you closed on the house without changing the agreed upon price.) An initial assumption might be that since you paid $0, and sold it for, say $800, that the full amount would now be taxable. However, instead, this would have (arguably) been considered a gift to you at the pool's market value at the time you purchased the home. Assuming the value did not increase by much, or at all since then, you would not need to treat the proceeds from the sale as income.

Clarification: In scenario #2, I claim the pool is "arguably" a gift because it's difficult to mix gifts together with other sales or trades. If you were audited over it, you might need to prove that the price of the home was going to be the same regardless of whether you elected to keep the pool. Otherwise the price you paid for the home would technically have been lower than the sale price. One way to approach these sort of classifications is to imagine that the auditor is omniscient, and then decide if they would agree with your classification.

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  • The pool was not specifically mentioned in negotiations at all. The offer contract (written on our side) listed some specific things that needed to remain with the house, but the pool was not included. However, the contract did contain language that things left on the property at the time of closing would become ours. (This ended up applying to more than just the pool; there were a few things of value/use left behind.) The seller did mention at some point (don't remember when) that all it needed was a liner to be used, so they were planning on leaving the pool (clearly, since they left it). Jan 31, 2022 at 4:21
  • @NeutronStar OK. It's obvious that both parties assumed the pool was going to stay. I suppose if you had asked to remove the pool they would have, and would likely not have reduced the price, so I believe Scenario 2 would apply. Do you mind if I ask how much you sold the pool for?
    – TTT
    Jan 31, 2022 at 5:15
  • I doubt you can construe this as a "gift". The seller sold the house as is with a bunch of personal property in it, but the personal property (including the pool) was tied to the sale. Had the OP not bought the house - the seller wouldn't have gifted them the pool.
    – littleadv
    Jan 31, 2022 at 6:29
  • @littleadv I agree with everything you said (except perhaps the first sentence). Suppose you flip it around- I can't imagine if the buyer had asked to remove the pool, that the seller would have reduced the price. Furthermore I don't get the impression the buyer purchased because of the pool. If both of those statements are true, what happens when something is left that has obvious value, is tied to the sale, but is not part of the sale?
    – TTT
    Jan 31, 2022 at 6:44
  • @TTT it doesn't matter. There's no intent of gifting the pool in this transaction, the intent is of selling the house.
    – littleadv
    Jan 31, 2022 at 6:48

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