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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13339
Experience:  15years with H & R Block. Divisional leader, Instructor
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My 3 siblings and I inherited 74 acres of farmland in Indiana

Customer Question

My 3 siblings and I inherited 74 acres of farmland in Indiana in December 12, 2012 on the death of our mother. We had the land appraised, which came in at a value of $10,500 per acre.
1. Can we assume that any capital gains tax will be based on the difference between 10,500 and the sale value? What is the current capital gains tax rate?
2. Will there be any other taxes (income, etc) that we will need to pay? On what basis?
3. How much can we gift to our children per year? Will the amount gifted reduce our taxes?
Thank you for your help.
Paul E Myers SS.......9927
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.
Hello,1. Can we assume that any capital gains tax will be based on the difference between 10,500 and the sale value? Yes, the value of the land on the date your mother passed would be your basis (cost) and the difference in that and sale is your gain or loss.What is the current capital gains tax rate? You would be allowed long term rates and those are determined by your regular income rate and filing status. Personal income tax rates start at 10% and gradually increase to 15% (both of these have CG rate at 0%) , then 25%, then 28%, then 33%, then 35% (all at 15% for CG), and finally reaching a top rate of 39.6% (20% capital gains). Each tax rate applies to a specific range of income. 2. Will there be any other taxes (income, etc) that we will need to pay? On what basis? No unless it was a farm business and you were selling the farm as a business.3. How much can we gift to our children per year? $14,000 to each child (each parent can give that so $28,000 together)Will the amount gifted reduce our taxes? No unfortunately.
Expert:  Robin D. replied 1 year ago.
I hope the answers to all your questions were helpful Please advise if you need more information.
Expert:  Robin D. replied 1 year ago.
Please let me know if I left out information. You can post below.

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