How to Avoid Excessive Taxes when You Sell the Ranch

When it comes to selling the family ranch or farmstead, sellers often end up paying upwards of 20% of the property’s value in taxes. However, if you want to keep more for yourself or your heirs and give less to Uncle Sam, there are several tax strategies you can employ to meet this goal.

One of the best ways to avoid capital gains taxes altogether is with a properly structured #1031 exchange. This allows you to sell one property and acquire another “like kind” property without recognizing immediate capital gains tax on the sale. And since the definition of “like-kind” is quite broad, you can exchange your ranch for an office building, multi-family rental property or even a strip mall.

So before you put up that for sale sign, be sure to explore the opportunities of section 1031 of the IRS code.

If a 1031 exchange is in your future, visit our website to learn more about these powerful tax deferral tools and our qualified intermediary and replacement property locator services.