Capital Gains on sale of farm
Thinking of selling a farm and wonder much my wife and I have to claim as capital gains?
Terry Says
That depends on your “cost basis” — the original purchase price plus all the capital improvements you’ve made to the property (and can document) along the way.
In addition, there may be some complications if you participated in federal programs, such as set-asides, along the way. Or if you took depreciation on some of the assets included in the sale.
And if a portion of the property is your personal residence for two years there may be additional tax exclusions. Click this link for an explanation of how much might qualify as a personal residence exclusion.
Once your gain is determined, and assuming you’ve owned the property for over one year, the gains will be taxed as a long- term capital gain. Currently the top rate for capital gains is 20%.
Read this from the federal farm bureau:
In this case you should definitely seek the advice of a CPA who has knowledge of the tax laws re agricultural properties.
