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# In June 1999 I inherited 36 acres of farmland after the death

### Resolved Question:

In June 1999 I inherited 36 acres of farmland after the death of my mother. When the estate was appraised the land was appraised at \$2400/acre. I am going to sell the land and have found a buyer who will pay \$4,500/acre. This means a gain of \$75,600 (4500 minus 2400=2,100 X36=75,600) My 2008 federal tax return has a taxable income of \$23,994. My state (Ohio) return taxable income is \$35,637. What taxes will I HAVE TO PAY?
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

Please verify that the appraisal back in 1999 was correct. You might want to contact a professional appraiser who will provide historical appraiser of the inherited property.

You correctly determines the capital gain.

That would be long term gain - taxed at reduced rate - not more that 15%

Part of the gain that fall into 15% tax bracket and below will be tax free.

Thus - if you are single the 15% tax bracket is limited by \$32,550

So \$32,550 - \$23,994 = \$8556 will be tax free and

\$75,600 - \$8556 = \$67044 will be taxed at 15% long term capital gain rate.

Ohio state taxes will be about 4.5%

Let me know if you need help with reporting.

Lev and 2 other Tax Specialists are ready to help you
Customer: replied 7 years ago.
Does this mean that federal tax owed will be \$10,056 and state tax \$3,016! i hope this is wrong.
Expert:  Lev replied 7 years ago.

Based on estimation above and my assumptions - that is correct. I wish to bring better news for you...

That is why I asked you to verify if the FMV back in 1999 was determined correctly - if the value was below the market value - you need to order a new historical appraisal.

Also I estimated based on 2008 tax rate and on assumption that you are single.

Lev and 2 other Tax Specialists are ready to help you