The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: S.O.S. MOTLEY FOOL STAFF Date:  12/28/2004  10:41 AM
Author:  galagan Number:  75008 of 127641

large acreage caries a lesser value per acre as opposed to selling by the acre.

Good advice from everybody, but let me throw in one more thing.

I've seen farmers with large amounts of land who sought to subdivide and sell lots. They have received advice from CPAs to the effect that if they do so and sell a sufficient number of lots, they technically become treated as real estate developers in the business of selling land, which turns their farmland into inventory and turns what would have been capital gains into ordinary income. This is an extremely bad result for most people.

The advice in one particular case was that the number of transactions that would get someone in trouble could be as few as four or five.

I didn't independently verify, so take it for what it's worth.

good luck,
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us