Tax implications for selling my third of my father's estate to my brother?

[ahawley88]

My dad passed away in June of last year and did not have a will. He was a farmer and had land, a house, etc. I have two brothers; one of them wants to buy my third of the estate as he wants to take over the farm. My third is valued at 450K, but we settled on 400K. Will there be any tax implications on this transaction, for me?

[tagteam]

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@ahawley88 wrote:

...one of them wants to buy my third of the estate as he wants to take over the farm. My third is valued at 450K, but we settled on 400K. Will there be any tax implications on this transaction, for me?

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There may not be any tax implications. The basis of inherited property is its fair market value on the date of death of the decedent. However, there could be timing issues (depending upon state law), this is a working farm, and there should be a written agreement.

Therefore, you should seek professional guidance in connection with this transaction.

[Anonymous]

actually there could be tax implications.  was an appraisal done?  you say FMV $450.  but if no appraisal what do you think will happen if the IRS audits and says FMV was only $300.   Or let's say the value was $450.   normally   upon sale you would be entitled to a capital loss of $50.   However, the sale to your brother may bar you from taking this loss.    definitely get tax advice 

[ahawley88]

Thanks for taking the time to reply. Yes, an appraisal was done and thats how the 450k value was determined. I did talk to a CPA who said there would be virtually no tax implications, but I didn't quite understand why.