Inheriting farmland can be more complicated than simply receiving the title to the real estate. Inherited farmland can take many forms including from a lifetime gift, or estate, or a trust. Considerations may differ depending on whether you have inherited farmland outright or in and entity such as a Trust, Corporation, or LLC.
Although Minnesota has no inheritance tax, the farmland in a Trust or Estate may be subject to an Estate Tax or Gift Tax depending on how it was received. Additionally, whether the land can be designated as Homestead will determine your real estate tax obligations. You may also need to pay Income and/or Capital Gains Tax depending on whether you receive farm rent income and/or whether you sell the real estate you have inherited. If you co-own the real estate with one or more co-tenants, there may be additional considerations when comes to paying the taxes and input costs, signing leases, collecting rent, and conveying and/or encumbering the property.
If you have questions about family farmland or inherited farmland, please contact Paul Moosbrugger at Farrish Johnson Law Office at the below contact information.