Use the sale proceeds to your benefit by selling a farm in Montana

Selling a farm or a ranch in Montana comes with its own unique set of challenges. Seeking assistance from a real-estate agent to successfully overcome such challenges is one of the clever decisions that can be taken by a farm or ranch owner. Selling the property at a high price is not a big deal but utilizing the proceeds effectively to your benefits need a lot of experience and knowledge.
Professional agencies possess the requisite skills and knowledge to help you grow your money by channelizing the earnings in profitable areas. They are dedicated to working with families who are looking to sell their farm or ranch in Montana and transitioning into retirement.

There are several financial strategies such as the 1031 Exchange that can help the seller defer the amount of tax payable by investing them in like-kind property. Utilizing the right means of savings will help to generate more money for a safe and secure future after retirement.

Tips to ensure a successful 1031 Exchange

Potential investors looking to benefit from a 1031 Exchange through selling a farm in Montana should pay close attention to some of the basic factors to ensure a successful IRC Section 1031 Exchange. These are –

Contacting the Accommodator: The the first task to be done upon deciding to perform an exchange is contacting 1031 Exchange Accommodator. He is responsible for working in close connection with the parties including the real-estate agent, closing office, accountant, and attorney.

Trading Up: The equity and net the market value of the property sold should be greater or equal to the replacement property in order to be eligible for a 100% deferment of tax liability. Where the value requirement is not met, the differential amount must be paid as taxes.

Replacement Period: After the tax filing date or closing of the first property, whichever is earlier, all replacement properties must be acquired within 180 calendar days from such date.

Identification Period: Within a period of 45 days from the date of property closing, the exchanger needs to identify the replacement properties and communicate it to either the closing company or the Qualified Intermediary.

Same Taxpayer: The same taxpayer who sold the relinquished property should acquire the 

replacement property in order to be eligible for a 1031 Exchange.

Know the basic steps to a successful 1031 Exchange

If you are a farm owner and want to follow the 1031 Exchange route, you need to know the basic steps so that you are aware of what the 1031 Exchange expert is doing with your property. The basic steps include –

         i)        Selling an investment property

        ii)       Handing over the capital gains to a qualified intermediary

       iii)     Identifying a like-kind property with a period of 45 days

       iv)     Negotiating the price of the like-kind property with the seller

        v)      Agreeing on the sale price

       vi)     Instructing your intermediary to channelize the capital gains to the title company or title holder

      vii)   Filling out the IRS form.

Businesses include personal property such as intangible assets like goodwill and tangible assets like real property. While real and personal assets qualify and can be exchanged for like-kind properties, goodwill does not qualify. Therefore make sure when you are selling a farm in Montana and investing in another property the same qualified under a 1031 Exchange.