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The Bobster
Lv 5
The Bobster asked in Business & FinanceTaxesUnited States · 8 years ago

taxes on sale of farm?

How would this play out tax wise.

My wife and I sell our farm we've had for 15 years in California for 800K. We have a cost basis of 150K. We pay off the 100k mortgage and buy a farm in Kentucky for 400K.

Any help on what the taxes would be and how we could reduce them would be appreciated.

Thanks in advance.

Update:

I forgot to mention it's also my wife and my principal residence.

I've heard something about like for like exchanges? Since we're selling a farm and buying another?

Update 2:

I forgot to mention it's also my wife and my principal residence.

I've heard something about like for like exchanges? Since we're selling a farm and buying another?

3 Answers

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  • ?
    Lv 7
    8 years ago
    Favorite Answer

    as a married couple, you don't have to pay tax on the property you sell unless you make over

    500,000 profit from the sale. you can deduct the 150,000 you paid for the CA farm plus any home improvements. from the 800,000 to lower your taxable amount. if the new farm cost more than you sold the CA farm for, you would pay no tax.

  • tro
    Lv 7
    8 years ago

    like kind exchanges, 1031, are for similar business assets, not personal residence

    there is an exclusion of $500K if you sell your residence after having owned it 5 yrs

  • Max Hoopla
    Lv 7
    8 years ago

    No way around tax on this one.

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