Have you been thinking about selling your farmland to invest in a new, perhaps larger, plot for expansion? Are you financially prepared for this step forward in your agricultural business?
Selling a farmland entails a lot of work. You’ll have to think about your crops and livestock and whether or not you’ll be selling them with your land. Then there’s also your budget and the taxes you’ll have to pay. 1031ex.com explains that you can save 20 to 30 percent of state and federal taxes on the difference between your land and the land you plan to invest in. Besides that, there are still other things you’ll have to consider before selling your farm. Here are 3 tips to keep in mind while you’re in this decision stage.
1. Make sure all ownership issues are straightened out
Whose name is listed on the deed as the owner? If you inherited this land, it may still be in the name of your parents. Asking for legal counsel would be wise to straighten things out to ensure a smooth sale.
2. Get a CPA involved
The tax implications of selling a piece of farmland can be huge and a CPA can help with this. Have them look into your taxes and the taxes attached to the land that you plan to invest in. Maybe a 1031 exchange would be best. A good CPA should be able to tell you your options.
3. Know everything about your farm
The total number of acres, your irrigation system, the recreational uses of your farm, pond sizes, if a water well was installed, soil fertility. There’s a lot of information about your land that you’ll have to review and have ready before you can sell your land.
There’s a lot of legwork and paperwork to do to ensure a successful sale. If things get too overwhelming, don’t hesitate to call a real estate professional who has specialties in farmland sales. Just keep in mind that this is all for the brighter future of your farming business.