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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 11577
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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My husband passed away 6 months ago & we have a piece of property

Customer Question

My husband passed away 6 months ago & we have a piece of property (farm land & pasture only, no home on it) that i need to sell. I've had it appraised (per my lawyer) & i have a farmer interested in buying it. The problem is, I will be paying out so much in capital gains tax and state taxes that i really won't have much left to live on....any ideas on how to avoid some of these taxes?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  Lane replied 1 year ago.
Hi,.First, I'm sorry or your loss..Second, it's important to point out that you'll get a step up in basis to the fair market vaue of the property as of the date of death....So if it was owned by your husband, you'll be selling it for essentially break even (sales price minus basis = Gain).And even if it was owned jointy, there will be a step-up on the half that he owned..Further Long-term gains and qualified dividends taxed at0% if taxable income falls in the 10% or 15% marginal tax brackets15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets20% if taxable income falls in the 39.6% marginal tax bracket.And again that's only on the GAIN, not on the entire sales price..And on ideas to lessen the blow on whatevefr gainz taxes there ArE, yuo might want to consider an installment sale... where the buyer pays over time, and you only pay tax on the gsains as you receive it each year ... providing both regular income and likely keeping yut total tax bracket at the place where there mey be NO capital gains tax (certainly lower than if it's all received in one year).
Expert:  Lane replied 1 year ago.
Not sure WHERE they came up with that 28 to 33 plus state comment ... the HIGHEST capital gains rate is 20% and THAT's only for those over certin income threshholds..Your more likely rate is 15%.And again, that's only on the GAIN portion ... and there will be NO gain on the portion that your husband owned..Please let me know your questions from here....Lane.

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