FORM LGT-181 Instructions    

          Land Gains Basis Calculation Foreclosure Property
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                   Please print in BLUE or BLACK ink only.

                                 General Information 
Under Vermont law at 32 V.S.A. § 10005(a), “[t]he provisions of the Federal Internal Revenue Code shall determine 
the basis of land sold or exchanged except basis for land transferred by a mortgagee who acquired the land by 
foreclosure or transfer in lieu of foreclosure shall be the amount of debt due the mortgagee, increased by the costs 
of acquisition, and decreased by the amount of any tax benefit due to bad debt loss on the mortgage debt.

This schedule will help you to determine the basis of land transferred by a mortgagee or judgment lien creditor who 
acquired the land by foreclosure or transfer in lieu of foreclosure based on the provisions and procedures explained 
above.  The purpose of this schedule is to supply general information to the public about basis determination for 
land gains tax purposes and does not replace the need for competent legal advice.

                                 Line-by-Line Instructions                                                           INSTR  (Place at FIRST page)
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In the box provided, enter the full name, and Social Security Number or federal identification number of the 
primary Transferor (Seller), the property address of the property being transferred, and the date of closing listed 
on the LGT-178, Vermont Land Gains Tax Return, this form will accompany.

Section 1 Debt Due 
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Line 1    Enter the principal balance from the judgment.  This does not include interest.

Section 2 Cost of acquisition
Line 2a   Enter the total of any legal fees paid by the seller when acquiring this property.

Line 2b   Enter the total of any recording fees paid by the seller when acquiring this property.

Line 2c   Enter the total of any other expenses paid by the seller when acquiring this property.  You must 
          enter a description of what type of expense this is, or the expense will be denied.

Line 3    Add Lines 1 through 2c and enter the result on this line.

Section 4 Tax benefit due to bad debt write-down
Line 4a   Enter the total amount of the loan write-down.

Line 4b   Enter the tax bracket from the federal and state marginal rates applicable to the mortgagee or 
          judgment lien creditor.

Line 4c   Multiply Line 4a by Line 4b and enter the result on this line.

Line 5    Subtract Line 4c from Line 3 enter the result here and on Form LGT-178, Line H4.

                                                                                                                     INSTR  (Place at LAST page)
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                                                                                 Schedule LGT-181 Instructions
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                                                                                                Rev. 11/19