If you sell farm land or other investment property, there is something called a 1031 exchange that you should be aware of. In short, the 1031 allows you to exchange one investment property for another investment property. When the first piece of land is sold it can result in a complete deferral of all state and federal taxes, allowing you to sell that property tax free.
The money taken in from the land sale must be used on another investment property. If you are selling one piece of investment property and purchasing another you should not have to pay a capital gain on the first piece since you are still investing the same amount, or more, on real estate.
A variety of properties are considered investment properties in the real estate world from rental properties, to land investments, to commercial real estate.
There are several rules which must be followed to qualify for a 1031 exchange. Please consult with your CPA or attorney to make sure you thoroughly understand the rules of the 1031.
After you understand the rules, when the time comes to make that next land transaction feel free to give me a call. I can help you sell or purchase that next piece of land!