My father sold the farm in Upstate NY back in 06. He couldn't afford the property taxes any longer. Made a profit and stays with his girlfriend now. He was paying a kings ransom every quarter and he paid some $43k for it after WWII. The more I think about buying some land, the more I think I won't ever. I can't afford too. I think the best days of the USA are behind my generation X. You all that fought in WWII and Korea if you made it had some decent years. I don't think I have a chance in hell to ever retire or live well.
If he was still farming the land or had just $1,500.00 a year income from either a farm product such as livestock or a crop or leased the land to someone for that amount or more than his property should have been taxed at the agricultural amount which is much lower than the tax rate on non agricultural land.
That is the way it is here in VA.
Where they will really get you is in capital gains tax when you sell.
Most farms were bought many many years ago at a lower price but are now worth considerably more and the difference is called capitol gains or profit.
Even then you only have to pay the higher land tax for the last five years that you owned the land, (provided it was still a working farm with at least 1,500.00 a year income), and if you are smart you make the buyer pay that back tax.
Back in Tennessee, and down in Texas, families I know have had to sell the farm and ranch when the old folks died. Even thou it was left to the sons and daughters, they could not afford the inheritance tax and the property taxes.
If the parents would have taken out a life insurance policy on themselves in their kids name, then when they die the policy would not go into their estate and there for is not taxable because the kids would own the policy and could use that insurance money to pay the inheritance tax.
My father owns a 232 acre farm here in VA and that is what we have done.
I have a $500,000 life insurance policy on him in my name that will be used to pay the taxes when he dies.
The parents are allowed to give tax free up to $10,000.00 a year per parent per child.
The child then writes a check to the insurance company using that money to pay for the policy.
This does two things.
First it pays for the policy and it also gets that amount out of their estate when they die.
I don't know what the amount is right now, it was the first million dollars of an estate is tax exempt.
There are ways to keep the government from getting their hands on all of it, if you just take the time to learn the little tricks that most big business use all the time.
Don't get me wrong, the government will still take a big cut, this is just a way of keeping their cut a lot smaller.
LONGTOM
