Real Estate Tax Question

[CoachHines3]

may be purchasing an old farmhouse from grandparents.

Grandparents are concerned they will have a big tax hit when they sell their home. I'm under the impression they will not because of the IRS rules that state, if you're eligible, you can have up to $500,000 in gain if you file jointly and not have a tax hit.

House sits on 13 acres, so grandparents could have a hit on some of the land, but it would be very minimal being the land itself is maybe 1200/acre.

Am I on the right track here?

Thanks!

 

[CycloneDaddy]

@isufbcurt

 

[SoapyCy]

no taxes. they'll be fine

 

[isufbcurt]

may be purchasing an old farmhouse from grandparents.

Grandparents are concerned they will have a big tax hit when they sell their home. I'm under the impression they will not because of the IRS rules that state, if you're eligible, you can have up to $500,000 in gain if you file jointly and not have a tax hit.

House sits on 13 acres, so grandparents could have a hit on some of the land, but it would be very minimal being the land itself is maybe 1200/acre.

Am I on the right track here?

Thanks!

It kind of depends:

You are correct that they would qualify for the "Sale of Main Home" exclusion

but

beings it is a Farm have they been using the Farm as a business? If so that will factor in some.

Kind of hard to give a more definitive answer without knowing all the specifics and I understand not wanting to put them on a message board.

 

[DSMCy]

may be purchasing an old farmhouse from grandparents.

Grandparents are concerned they will have a big tax hit when they sell their home. I'm under the impression they will not because of the IRS rules that state, if you're eligible, you can have up to $500,000 in gain if you file jointly and not have a tax hit.

House sits on 13 acres, so grandparents could have a hit on some of the land, but it would be very minimal being the land itself is maybe 1200/acre.

Am I on the right track here?

Thanks!

It's probably worth spending a little money to speak with a tax expert.

 

[discydisc]

It's probably worth spending a little money to speak with a tax expert.

Nonsense, this is cyclone fanatic, there are experts everywhere! I would recommend doing the transaction in bitcoin, the government loves crytpo!

 

[CoachHines3]

It kind of depends:

You are correct that they would qualify for the "Sale of Main Home" exclusion

but

beings it is a Farm have they been using the Farm as a business? If so that will factor in some.

Kind of hard to give a more definitive answer without knowing all the specifics and I understand not wanting to put them on a message board.

I should have noted that the 13 acres the home sits on are not income producing whatsoever. No business runs off those 13 acres.

 

[isufbcurt]

Nonsense, this is cyclone fanatic, there are experts everywhere! I would recommend doing the transaction in bitcoin, the government loves crytpo!

Straight Cash or nothing

 

[discydisc]

I should have noted that the 13 acres the home sits on are not income producing whatsoever. No business runs off those 13 acres.

Would you be buying all 13 acres with it? Are they zoned as ag?

 

[CoachHines3]

It's probably worth spending a little money to speak with a tax expert.

well its not my issue to deal with, its my wifes grandfathers issue. Getting an old, stubborn, Irishman farmer to spend any money whateso-ever or ask any questions what-so-ever is hard.

So I'm mainly asking for my knowledge.

 

[isufbcurt]

I should have noted that the 13 acres the home sits on are not income producing whatsoever. No business runs off those 13 acres.

If that is the case and they satisfy the criteria for "Main Home" (https://www.irs.gov/publications/p523) then there should be no tax on the sale.

 

[CoachHines3]

Would you be buying all 13 acres with it? Are they zoned as ag?

yeah, we'd be purchasing all 13 acres and it is zoned as AG.

He sold off 100 some acres, on contract, to a couple of his sons. That is all crop land.

 

[DSMCy]

well its not my issue to deal with, its my wifes grandfathers issue. Getting an old, stubborn, Irishman farmer to spend any money whateso-ever or ask any questions what-so-ever is hard.

So I'm mainly asking for my knowledge.

lol Yah I can understand that.

 

[isufbcurt]

Feel free to PM me if you want.

 

[cyfan92]

Definitely hire or seek professional advise

 

[SoapyCy]

Feel free to PM me if you want.

gross. get a room

 

[mapnerd]

yeah, we'd be purchasing all 13 acres and it is zoned as AG.

He sold off 100 some acres, on contract, to a couple of his sons. That is all crop land.

Is it also classed Ag by the assessor? That will make a huge difference on property taxes. Put a couple chickens or goats on there. File whatever tax form that is that you need to be a farmer, and put like $100 profit for the year. Boom, you are ag. Seriously though, will be nice to have the property class of ag.

 

[CycloneDaddy]

well its not my issue to deal with, its my wifes grandfathers issue. Getting an old, stubborn, Irishman farmer to spend any money whateso-ever or ask any questions what-so-ever is hard.

So I'm mainly asking for my knowledge.

Could be worse, could be a Dutch farmer.

 

[isufbcurt]

gross. get a room

We did and now I am smoking my cigarette.

 

[CoachHines3]

Is it also classed Ag by the assessor? That will make a huge difference on property taxes. Put a couple chickens or goats on there. File whatever tax form that is that you need to be a farmer, and put like $100 profit for the year. Boom, you are ag. Seriously though, will be nice to have the property class of ag.

Yeah, assessors page says ag