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Sell Land before death or after?

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RandTall

Junior Member
What is the name of your state (only U.S. law)? Texas

My parents have owned 35 acres for at least 20 years. It's not their home, but the rent out a mobile home on the property and lease the rest for cattle. The value of his estate is below the amount that would cause an inheritance tax. I know if they sell the land before their death there would be a capital gains tax. If the land was past on as part of their estate the basis for the recipient would be the FMV at the time of my parents death. Can we avoid most of the capital gains tax by allowing it to pass upon their death?
 


curb1

Senior Member
You asked, "Can we avoid most of the capital gains tax by allowing it to pass upon their death?"

Yes.

What is their basis? What is the value if they were to sell now?
 

curb1

Senior Member
Your decision could hinge on whether the money is needed in the near future. For tax purposes it would probably be best to wait.
 

RandTall

Junior Member
They are not in need of the money. They would be willing to pass on the land to the siblings. So it sounds like no one would be pay federal taxes on the increased value of the land from the purchase date to the date of death. So transfering the land upon death seems to be the way to go.
 

anteater

Senior Member
They are not in need of the money. They would be willing to pass on the land to the siblings. So it sounds like no one would be pay federal taxes on the increased value of the land from the purchase date to the date of death. So transfering the land upon death seems to be the way to go.
From a tax perspective, it usually is.

On the other hand, there is always the possibility of a long illness, long term care, lawsuits, etc. that might require that the property be sold.

There are always trade-offs.
 

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