Transferring Farm Assets or Retiring From Farming: Tax Tips When You’re Selling

Farmers and others interested in maintaining the working landscape need to plan carefully in order for farms to be successfully transferred. This is true if the transfer is within a family from one generation to the next or between unrelated, retiring and beginning farmers. One of the most important aspects of a successful transfer is dealing with accumulated assets. Retiring farmers that I have worked with know that they will owe capital gains tax if they sell assets. They fear that these taxes will "take it all." To make matters worse, retiring farmers often don't have a clear understanding of tax laws concerning gifts and inheritance. In this series of articles I will clarify the three common ways for an owner to transfer assets - sale, gift, and inheritance - and touch on the role that farm assets play in farmers' retirement planning. Ways to Transfer Farm Assets Most farmers build up their assets over a lifetime. By the time they begin thinning about estate planning, farm transfer or retirement, there are many, many assets to think about, like inventories, livestock, machinery and equipment, buildings, and land. Transferring these assets takes a considerable amount of planning. Farm

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