I inherited a 113 acre farm near Johnstown PA upon my fathers death in 2010. I paid an inheritance tax
based on his estate assets to PA but since there was no Federal Estate Tax
in effect for 2010 I didn't pay any federal taxes
. I am now planning
to sell the farm to the man who farms it but since I did not get a FMV appraisal subsequent to his death, I was trying to determine if I need to get an appraisal and whether it would have any legitimacy since it is now more than 3 years since his death. It is doubtful if the property value increased by much if at all in this time period. I had requested an appraisal but the person who was going to do it got sick and I never followed up on it since my wife was suffering through terminal cancer.
The asset summary for paying the PA inheritance tax had an appraised value of 123,000
for the farm including a house, barn and detached garage. I am selling the farm for 220,000
and believe it is a better valuation than the appraised amount on the inheritance form. Obviously I want to avoid capital gains taxes
if I can given the circumstances. and if I have to pay any I would prefer to do so in 2014 since I have done fairly well in the stock market this year.
Second question: When is sale a sale as far as tax purposes? By this I mean if I entered
into sales agreement for the sale of the farm this calendar year, but settlement would be in 2014 at which time all but 5000 of the agreed to 220000 amount would be transferred to me, would the sale date for tax purposes be this year or when the money is actually transferred to me at settlement? The 5000 down payment would be held in escrow until settlement.
IThank You. Thomas Knapp