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I inherited farm property in Kansas in 2000 which I now am ...

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I inherited farm property in...
I inherited farm property in Kansas in 2000 which I now am thinking about selling. My residence is in Texas. How can I limit taxes? Can the proceeds be put directly in a retirement type account and pay taxes on only amounts taken from the account?
Submitted: 9 years ago.Category: Tax
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Answered in 12 minutes by:
2/1/2008
Tax Professional: Lev, Tax Advisor replied 9 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
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The only way to defer taxes - purchase another similar property as part of section 1031 exchange. Otherwise - you will recognize taxable gain.

That likely will be long term gain with reduced tax rate. The basis for inherited property is a fair market value of the property on the day the decedent died (or another day if selected by the executor of the estate).

Moreover - as the property is located in Kansas - that will be Kansas income and state tax return and state taxes may due.

You may not defer taxes from capital gain by transferring the gain into retirement fund.

But you may make retirement contribution regardless of the capital gain if you qualify. That will reduce your taxable income.

You may also consider installment sale - so your capital gain will be spread over several years and would reduce tax pressure.

Lev
Lev, Tax Advisor
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