parent selling real property

[SiberianDVM]

My mother wants to sell 65 acres of woodland that is part of her family's original land grant, so it has been in the family for centuries. Really. She inherited it from her mother.

I found a buyer and have negotiated a decent, although not great, price, since it is undeveloped.

How does she figure how much tax she will owe on the sale?

If she gives me some of the money, will I owe tax?

What to do with the cash in this FU economy? I'm trying to resist buying a new Porsche.

[MBAtarga]

How long ago did she inherit it? Do you know the value of the property when it was inherited?

[SiberianDVM]

She inherited it in 1984, when my grandmother died. Dormant farmland was used for growing pines for timber, so it was probably worth about $1000/acre.

[MBAtarga]

Mom passed away in July. We sold the house within a few months - so no net gain in value in that short term. The selling price then set the basis of value and the full sale price was our inheritance. Split with my 4 siblings - it was all tax free, as was the cash in her estate.

In your Mom's situation, she needs an appraisal for what the land was worth at the time of inheritance. The gain in value based on the selling price is a taxable event to her.

Note - IANAL, but we just went through this with options of selling the house vs holding it for a period of time. We decided to sell based on current housing market.

[SiberianDVM]

Thanks, Mark.

Sorry for your loss. My Mom will turn 90 in October, and she's not doing well, and I think she wants to take care of things while she still can. I think I'll hold off buying the new Porsche in case she needs the money for medical bills.