Should I show the income from a sale of ancestral farm land as regular income or long term capital gain. the sale was at a lower than fair market value.

[pasupathi]

The land my wife inherited from her mother had been used as a pasture land with no structures.  the sale was to a non-profit conservation trust.

[ColeenD3]

Enter it in the investment section as land. Your basis is the FMV on the date of death. You may not have much of a capital gain. You may have a loss if you had expenses of sale to add to the basis.

[pasupathi]

Thanks.  It is going to be tricky to get FMV because the donor deeded the land about 30 years ago.

[ColeenD3]

Did she deed it while she was still alive? Then it is not an inheritance, it is a gift. You would use the original owner's purchase price when they bought it.