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Old 09-12-2015, 10:43 AM
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KY LLC member. Sale of family farm

Currently have family farm for sale and have been approached by a non profit organization to purchase. Obviously a lot of details to come. Looking for the best option or options to advise family members on potential Tax issues should sale happen.
Would a donation to the non Profit at time of sale benefit tax obligations?
Would payments to family over several years be a better option?
Other options better?
Websites to visit to make me smarter?

appreciate your thoughts in advance.
thanks



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Old 09-12-2015, 04:50 PM
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Originally Posted by ltcmartyo View Post
Currently have family farm for sale and have been approached by a non profit organization to purchase. Obviously a lot of details to come. Looking for the best option or options to advise family members on potential Tax issues should sale happen.
Would a donation to the non Profit at time of sale benefit tax obligations?
Would payments to family over several years be a better option?
Other options better?
Websites to visit to make me smarter?
Currently have family farm for sale and have been approached by a non profit organization to purchase. Obviously a lot of details to come. Looking for the best option or options to advise family members on potential Tax issues should sale happen.
Would a donation to the non Profit at time of sale benefit tax obligations?==========>>Yes aslongas you , as a donor, ITEMIXE DEDUCTIONS on Sch A of 1040; this means that UNLESS you itemize deductions on Sch A of 1040 on your return, you CAN NEVER deduct the donation on your return. An asset held for more than one year is considered a long-term capital asset. The gift/donation of a long-term capital asset qualifies for a charitable tax deduction at FMV. However, the deduction for a gift/donation of a long-term capital asset is limited to 30% of your AGI.
But when making a gift/donation of long-term capital gain property, you may elect to deduct the gift at cost basis instead of FMV. This is a helpful option for a donor who wants to make a large gift of appreciated property that has a reasonably high basis. If you make this election, you, as a donor, take a deduction at cost basis, are allowed to apply the gift/donation limit of 50% of AGI and but must deduct any carry-forwards from previous years at cost basis.


Would payments to family over several years be a better option?====> Making a gift , up to $14K per peson for 2015, your siblings/chikdren ore tc does not ordinarily affect your federal income tax since you cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). The annual exclusion applies to gifts to each donee. In other words, if you give each of your children/sibliings or friends $14K on or after Jan 1, 2013, the annual exclusion applies to each gift, this means that you do not need to even file; this means that you do not need to even file form 709.el form 709.

Other options better?
Websites to visit to make me smarter?========> UNLESS you donate it to 501c3 charity, you can not deduct your donation on your return; Even you donate it to a charity, to claim the donation on your return, you MUST itemize deductions on Sch A of 1040.

Tax Topics - Topic 506 Charitable Contributions



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Old 09-13-2015, 09:07 AM
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Join Date: Sep 2015
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Quote:
Originally Posted by Wnhough View Post
Currently have family farm for sale and have been approached by a non profit organization to purchase. Obviously a lot of details to come. Looking for the best option or options to advise family members on potential Tax issues should sale happen.
Would a donation to the non Profit at time of sale benefit tax obligations?==========>>Yes aslongas you , as a donor, ITEMIXE DEDUCTIONS on Sch A of 1040; this means that UNLESS you itemize deductions on Sch A of 1040 on your return, you CAN NEVER deduct the donation on your return. An asset held for more than one year is considered a long-term capital asset. The gift/donation of a long-term capital asset qualifies for a charitable tax deduction at FMV. However, the deduction for a gift/donation of a long-term capital asset is limited to 30% of your AGI.
But when making a gift/donation of long-term capital gain property, you may elect to deduct the gift at cost basis instead of FMV. This is a helpful option for a donor who wants to make a large gift of appreciated property that has a reasonably high basis. If you make this election, you, as a donor, take a deduction at cost basis, are allowed to apply the gift/donation limit of 50% of AGI and but must deduct any carry-forwards from previous years at cost basis.


Would payments to family over several years be a better option?====> Making a gift , up to $14K per peson for 2015, your siblings/chikdren ore tc does not ordinarily affect your federal income tax since you cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). The annual exclusion applies to gifts to each donee. In other words, if you give each of your children/sibliings or friends $14K on or after Jan 1, 2013, the annual exclusion applies to each gift, this means that you do not need to even file; this means that you do not need to even file form 709.el form 709.

Other options better?
Websites to visit to make me smarter?========> UNLESS you donate it to 501c3 charity, you can not deduct your donation on your return; Even you donate it to a charity, to claim the donation on your return, you MUST itemize deductions on Sch A of 1040.

Tax Topics - Topic 506 Charitable Contributions
Thanks for your quick reply..... again, needing to read up on the subject. We formed the LLC (in 1994) once the farm had been gifted to the next generation... now for the main reason to complete the sale .
Would the LLC take in the closing of the farm, maybe utilize the donation and capital gains issues, pay taxes required and make distribution to its members?
Would we have less taxes if the LLC held the mortgage for several years?

I'm sure I will generate more Q with your A... be patient w/ me. This is interesting to me to be able to give good guidance to my siblings..... again thanks in advance



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