Growing up on a family farm for most of us, was a great experience. Daily chores, working with parents and feeling the freedom of the open spaces was a true gift. It also provided a lifetime of great memories that will never be forgotten.
Your Mom and Dad may now be gone. The current tenant is doing a great job farming the land and the rent check is a welcome site every year. It’s just your brother(s) and sister(s) now, but you all live in different cities with your own families.
The last time you were all together the topic of selling the farm came up. Parting with the farm almost felt like parting from the memories. But is that what stopped the conversation? Probably not…it was probably the thought of paying the taxes on the sale of the farm.
Because it is farm land, the IRS provides an approach that other industries don’t experience. Deferring the taxes on the sale of land yet receiving a loan of up to 95% of the net sale is truly powerful. Each of your brother(s) and/or sister(s) can defer at different lengths of time and receiving a loan means that each of you can invest those dollars in any way that is best for them.
The appropriate taxes will be due for each of the siblings when their term is reached, but each will have time to utilize the power of present value of money coupled with a well thought out investment strategy. So, when the taxes are due, they are paid with cheaper dollars as compared to the date of the farm sale.
Memories of the farm will always be with you. It may be time to create new memories with your family by planning wisely for the future.
The Power of Preserving Value is in your hands!