What are you plans?
When you sell your farmland, it’s not the sale price that determines how much money you walk away with; it’s what you plan to do with the money.
If you receive the money directly, either by check or bank wire, you may have to pay capital gains taxes to the state of California and the federal government. Depending on how much your land has appreciated, your tax bill could be 50% or more of the sales price.
Most of our clients who sell their land because they are ready to get out of farming choose to reinvest the proceeds in a qualified real estate investment called a 1031 Exchange. This can significantly reduce or eliminate the impact of capital gains taxes and provide you with a stable income stream that is entirely passive, requiring little to no involvement on your part. The most common investments are commercial triple net (NNN) opportunities with 20-year leases and regular monthly payments. NNN lease means that the tenant pays the property expenses, building repairs and maintenance, property taxes, and utilities.
As a Hoekstra and Associates Real Estate Client, we will provide you with a list of qualified investment options that make the most sense for you and your situation. We tour the investments with you, write the offers, and arrange legal counsel to review leases and purchase agreements.
We walk with you, step by step, from evaluations through closing to help ensure every detail is handled and deadlines are met.
We love helping good people make wise decisions on the best use of their land sale proceeds.