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Thumb of Michigan | sand85 - 1/11/2025 12:45 If you inherited it there is a basis.
The sale is a capital gain.
You will pay taxes on the difference between the basis (what it was worth when you inherited it) and the sale price, and maybe depreciation recapture on the value of the buildings. Details matter.
The federal capital gains tax rate is graduated, 0, 15, and 20%. Just figure about 15% on the gain for easy federal figuring. You might be able to accomplish a 1031 tax free exchange.
I have no idea what OH’s capital gain taxes are.
Pay your tax guy for advice, it is worth it when dealing with these kinds of numbers.
Might want to look a little closer on the value at death/inherited. This is where the devils in the details, I always recommended to clients to get a licensed appraiser involved (not a realtor's "market study", which is usually free). A lot of folks want to call a "market study" an appraisal and realtors don't always correct them. This needs to be done within six (6) months of death. The easiest alternate valuation date to use is the date the appraisal is done (if within 6-month window). IF this property was given to you BEFORE death (not inherited, a 'gift' was given), this creates a whole different can of worms. Normally your cost basis is the basis of the giver.
See a CPA soon or yesterday is the best idea, discuss possible selling on a land contract or installment sale to possibly reduce Federal taxation. | |
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Taxes on land sale.
