Explore the 1,000’s of tax questions answered by professionals.

Back to list

QUESTION DETAIL

Related User

Votes

My husband and I live in AL. We have a farm in Ohio. We deeded the farm to 3 children, keeping a life estate for ourselves. Now the 3 children want to sell the house. The farm has been in the family for 3 generations. If we allow them to sell, and we get $200,000 of the sell, what is our tax liability? Do we have to pay capital gains or can that be taken from the top?


ANSWER


Expert Mark Anderson's Answer:

You might be able to exclude a portion of your personal residence. The rest of the farm will be subject to capital gains.  You might want to consider doing a 1031 exchange in to another property if you want to retire like a rental property.  Also, there may be an issue as to what value is the life estate vs the portion owned by your children.  I would talk to your tax attorney or CPA before the sale. 

Mark Anderson, JD

Montana

21 yrs experience

  • Currently /5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
110 Ans.