I am cautious about selling on contract because I have been burned in a land contract sale. In a land contract the seller carries a significant amount of risk if land prices fall before the land contract is completed. The seller is OK as long as land prices continue to rise, (the seller gets the land back in a default) but the seller can take a lose when land prices fall before the contact is completed.
In the 1980's my family sold off a small plot of land, for a very good price, to a neighbor who had just purchased the adjoining farm. The buyer wanted to buy it on a ten year land contract because he no longer qualified for another mortgage. Our accountant assured us it was a very good deal.
A long story short, commodity prices fell, land prices fell by 50%, the neighbor lost the farm he had just bought and he re-negotiated our land contract to the then current lower price per acre. We wound up settling for 60% of the original sale price.
Right now federal capital gains taxes are only 15% on your actual capital gain since you inherited the land. You don't pay tax on the bias value at which you inherited it, only the gain since you've owned it. Check what your state capital gains tax rates are.
Have your accountant put down on paper your taxes and net procedes from an outright sale and and from a land contract. Also do your homework or consult a lawyer about the additional risks in a land contract. You may find the tax savings are low compared to your extra risks in a land contract sale. At minimum, make sure you are fully protected in the contract.
Do what is best for you and your sister, your attorney may just be trying to drum up some work for himself when his business is slow.
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Today's Featured Article - Gettin My Old Tractor Home - by Clayton Sweeney. My name is Clayton Sweeney. I am from Southern Maryland in a small town called Lothian. I am 20 and my father and I are the proud owner of a 1954 Allis Chalmers WD-45. When I was 18, I dated a girl in the next county over. Her family are tobacco farmers. It was a cold Thanksgiving evening, and we were going up to her Grandparents house. As we passed one of their barns, I noticed something orange in the corner of my eye in this old shed. It was pretty dark and I asked what it was
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