We're selling our inherited farmland to my wife's brother contract for deed. How do we file?

[ingeborgdot]

We have farmland we inherited back in 2001. My wife's brother has been farming it since 2001.  We now decided to sell it to my wife's brother who actually farms it for us. I know we have to pay capital gains, but we are also doing contract for deed to spread out his payments over several years instead of a lump sum to help him out since it is a nice chunk of money.

What sections will we need to fill out in Turbotax to show we sold it for a price compared to what it was worth in 2001? And then how do we declare we are not getting the full amount and only partial payments for several years.

I would like to keep using TT for this, but if you think it is too complicated, I can turn it over to a professional in town to do it.

I have tried several scenarios in an older copy of TT just to see how it would work, but I don't think I've been doing it properly.

Any advice would be greatly appreciated.

[Mike9241]

Assuming you have not been reporting the farming activity,  you can use the installment sale method of reporting which is form 6252. it's under the "less common income section" in Tutbotax. That installment sale must bear interest 

you report the date acquired/sold, gross sales price, tax basis as the cost that would be the Date of Death (fair market) value in 2001 plus improvements made, sales expenses, and the principal and interest collection for year. If there is no interest see a tax pro. 

if you have been reporting the farming activity in your 1040, and have multiple assets that were being depreciated,  you may need a tax pro to do the return. 

[ingeborgdot]

We have been renting him the land and that has been reported for the last 20 years or so. We have been doing the land income from rental for that time.

When you say the installment must bear interest, what happens if we are not charging interest? Or am I missing something? So, if we did nothing to the land, and her brother just farmed it and paid us cash rent, we had no sales expenses or anything else to do with it other than collect rental land cash rent, we need to see a tax pro? I would think that would be easier with no interest.

[ingeborgdot]

How do I get a Turbotax Pro???