Capital gain on development agreement refers to the profit made from the sale of property that was developed under a development agreement. A development agreement is a contract between a landowner and a developer that outlines the terms and conditions for developing the property.

When a landowner enters into a development agreement with a developer, they typically provide the land for development while the developer provides the funds for the project. The developer then builds on the land and sells the property for a profit. The landowner receives a share of the profits made from the sale.

Capital gains tax is a tax on the profit made from the sale of an asset. In the case of a development agreement, the landowner is subject to capital gains tax on their share of the profits made from the sale of the developed property.

Capital gains tax rates vary depending on the length of time the asset was held. If the asset was held for less than a year, it is considered a short-term capital gain and is taxed at the individual`s ordinary income tax rate. If the asset was held for more than a year, it is considered a long-term capital gain and is taxed at a lower rate.

In addition to capital gains tax, there may be other taxes and fees associated with a development agreement. For example, the local government may charge fees for permits and inspections, and there may be property taxes that need to be paid on the developed property.

It`s important for landowners to understand the tax implications of entering into a development agreement. They should work with a tax professional to ensure they are complying with all applicable tax laws and regulations.

In conclusion, capital gain on development agreement is the profit made from the sale of property that was developed under a development agreement. Landowners are subject to capital gains tax on their share of the profits, and should work with a tax professional to ensure they are complying with all applicable tax laws and regulations.