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If you inherit farmland and 3 siblings agree to sell it in…

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If you inherit farmland...

If you inherit farmland and 3 siblings agree to sell it in 2018, will you owe taxes?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

3 siblings inherit 60 acres of Indiana farmland in 2018, and sell it. Do they have to pay income taxes next year

Accountant's Assistant: Is there anything else the Accountant should be aware of?

The seller is paying the improvements in drainage For $15,000 at the request of the buyer. No one from the 3 sellers lives on the property. The buyer already owns a big portion of other farmland and has leased the property from the owner who died recently. The 3 siblings are his children.

Submitted: 29 days ago.Category: Tax
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3/22/2018
Tax Professional: Robin D., Senior Tax Advisor 4 replied 29 days ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,610
Experience: 15years with H & R Block. Divisional leader, Instructor
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Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 29 days ago

They will owe if they get more for the farmland than its value on the date the deceased passed away. They will all split the fair market value on the date they inherited as their cost plus the improvements and the sale price.

If the sale price is more than the FMV with the improvement they will pay tax on that portion. The pay when they file their returns.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

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