Green New Deal

[Deleted User 89]

Not on long term (more than 1 year) capital gains. They are governed by the bracket above based on profit amount. If you have capital gains in the short term (less than 1 year) you are subject to taxes at your federal tax bracket rate.

Note this is applicable to assets only - capital gains tax rates on property sales are governed by a different set of rules and can be deferred completely (up to 250,000 per individual or 500,000 per married couple) provided you only file for the exemption once every 2 years. If you're flipping properties more often than that there is a seperate (and higher) capital gains tax bracket that is used to determine your tax rate.

so...getting ready to sell some farm land (inheritance) that we've had for ~10 years. sibs and i won't clear 6 figures each, so we should be good?

[TDub]

I'm no tax expert but I believe so. I'm not sure how it works if you didnt purchase the property initially. Inheritance sums sometimes fall under a different tax code regarding "gifts". There is a tax code that only allows 13k in personal "gifts" to be recieved per person per year. Because it is an inheritance estate I'm not sure if that falls under a gift or under a capital gains property income. A tax guy I'm sure would be able to speak to that more capably than I can.

[Deleted User 89]

I'm no tax expert but I believe so. I'm not sure how it works if you didnt purchase the property initially. Inheritance sums sometimes fall under a different tax code regarding "gifts". There is a tax code that only allows 13k in personal "gifts" to be recieved per person per year. Because it is an inheritance estate I'm not sure if that falls under a gift or under a capital gains property income. A tax guy I'm sure would be able to speak to that more capably than I can.

i appreciate the perspective

[TDub]

Waiting for a lumber delivery I think I have gleaned the following regarding inheritance properties.

The property would be subject to capital gains taxes. However, you cant file for the capital gains exclusion on the property unless you move in and live there for 2 years.

The good news. The basis for determining what your "gains" would be is reset at the time of the dependents death, NOT based on what they paid for the property. Meaning, if the property has an assessed value of 100k at the time of death and you sell the property for 105k you are only responsible for paying capital gains taxes on 5k of that total sale value. If you sell the property for the same price that it was assessed at (at the time of death/inheritance) you are not subject to any gains taxes provided you fill out the proper estate acquisition forms. Essentially free money up to the value of the property at the time of acquisition.

[TDub]

Decendents....not dependents

[TDub]

Alternatively, if you establish that as your home (ie: have mail sent there) and keep the property for 2 years you can apply for the exclusion and sell the property for up to 250k above assessed value tax free.

[TDub]

I'm not sure how that applies when the property is divided among several non married peoples. I assume it still is based on total value and you would each be responsible for your share of the profits exceeding the assessed value.

[Deleted User 89]

that’s what i found as well

i think the property has actually dropped in value since we inherited it, so may not have to pay a dime