Sale of inherited farm

[bartow7]

I inherited half of my family farm when my father died in 1992 and the other half when my mother died in 2009. I paid a state registered real property appraiser to provide me a Broker's Opinion of the value of the property at those two points in time. I have sold the farm this year. I assume I have to report capital gains on the sale. Will this "Broker's Opinion" be acceptable to use to calculate my cost basis? The total value in 1992 was $96,000.  In 2009 it was $264,000.  The farm was not my primary residence. I rented the land but just reported it as other income each year. Will I be able to deduct to cost of the "broker's opinions" and the appraisal anywhere? How do I calculate the basis?

[Critter-3]

I highly recommend you seek a sit down with a local tax pro to be educated in this situation since the rent should have gone on a Sch E and if there were any residential buildings that were also rented then you have some big issues to correct. 

How do I calculate the basis?   https://www.irs.gov/pub/irs-pdf/p551.pdf

[Mike9241]

if the total value of the farm in '92 was $96K your tax basis in the 1/2 you inherited would be $48K + the cost of the appraisal assuming the amount was not deducted by the estate on form 1041 and if the total value of the farm in '09 was $264K your tax basis in the other 1/2 you inherited would be $132K + cost of the appraisal again assuming the cost of the appraisal was not deducted by the estate on form 1041.  

Will this "Broker's Opinion" be acceptable to use to calculate my cost basis - I certainly would use them but understand the IRS has the right to challenge those valuations.  

in addition, if you made major improvements to the farm after you inherited all of it they would also add to your tax basis. only 50% of any major improvements made between the time you inherited the initial 1/2 and the time you inherited the second 1/2 would add to your tax basis.

[Opus 17]

You also must reduce your cost basis by any depreciation you took or could have taken over the life of the property as a rental.  Land doesn't depreciate, but buildings and equipment do  (barns, house, other outbuildings, tractor, etc.).   Depending on what you actually rented, you may have to account for depreciation.  If you could have claimed depreciation but never did, that mistake might be fixable but you would need professional help.