My mother owns a small farm together with her brother and sister. They are in their upper 80's. My sister, brother, and I are the only heirs. We've been told that we will inherit the assets of the three elders.
The elders are considering selling the farm. Their reasons is, "we don't need it any more". None of them is wealthy, but they don't need cash either. They're asking the heirs what we (the heirs) think. I feel it would be better to keep the farm because of the costs incurred in selling it.
The primary costs of selling the farm as I see it include: an 8 percent realtor's fee, and a 15 percent capitol gains tax (or would that be income tax?).
I'm thinking it would be better for the heirs to inherit the farm directly. They could then sell it and avoid the capitol gains tax since the cost basis would be the value of the farm at the date it was inherited. The heirs might even sell the farm themselves, avoiding the realtor's fee as well.
I'm not an accountant. My thoughts may be completely bogus. What do you think? Should the elders keep the farm or sell it?
thanks!
The elders are considering selling the farm. Their reasons is, "we don't need it any more". None of them is wealthy, but they don't need cash either. They're asking the heirs what we (the heirs) think. I feel it would be better to keep the farm because of the costs incurred in selling it.
The primary costs of selling the farm as I see it include: an 8 percent realtor's fee, and a 15 percent capitol gains tax (or would that be income tax?).
I'm thinking it would be better for the heirs to inherit the farm directly. They could then sell it and avoid the capitol gains tax since the cost basis would be the value of the farm at the date it was inherited. The heirs might even sell the farm themselves, avoiding the realtor's fee as well.
I'm not an accountant. My thoughts may be completely bogus. What do you think? Should the elders keep the farm or sell it?
thanks!