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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29964
Experience:  Taxes, Immigration, Labor Relations
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My name is ***** ***** hamm and I want to know yhe tax

Customer Question

Customer: my name is ***** ***** hamm and I want to know yhe tax implications of selling the familly farm. it has been in the family for 110 years and worth probably $150,000.00. We do not live on the farm.
JA: Thanks. Can you give me any more details about your issue?
Customer: i'm wanting to know how I can avoid or limit the amount of tax I pay on the sale proceeds. what would the tax rate be for an outright sale with no re-investment in other property.
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Hi and welcome to our site!

Selling proceeds are not taxable -

but you would need to report the sale transaction and calculate the gain - the gain will be added to your taxable income.
The farm might include several assets - and you will report as a sale of separate assets where the farm land most likely is the most valuable asset.

You would need to apportion the sale price to each asset.

The gain is calculated as (selling price) MINIS (adjusted basis)
The basis is generally original purchase price plus improvements - but if the property was inherited - the basis is determined as the fair market value at the time the decedent passed away.

So - these would be first steps - (1) allocate the sale price among all assets; (2) determine the basis separately for each asset (3) calculate the gain for each asset.

Reporting might be different if you were running a farming business or if the farm was used as an investment property.

Any questions?

Customer: replied 1 year ago.
Expert:  Lev replied 1 year ago.

Let me know if you need any help with reporting.


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