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levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 28084
Experience:  Working for a large tax preparation service
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What is the capital gain tax on farm land?

Customer Question

what is the capital gain tax on farm land?
Submitted: 8 months ago.
Category: Capital Gains and Losses
Expert:  levr replied 8 months ago.

First step - to calculate the gain - that is

(selling price) MINUS (basis)
The basis is generally your purchase price - assuming the property was purchased.

Expert:  levr replied 8 months ago.

That gain is a long term capital gain (and is taxes taxed at reduced rates) if the property was owned at least one year.
If you sold on installment - when payments are spread over seven years - we need to apportion a part of the payment as interest - that part is taxed as ordinary income.
Capital gains are taxed at reduced rates - depending on your total income - it might be zero percent, 15% or 20%.
I will help you to estimate your tax liability if needed.

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