Question on how taxes are treated for inherited land. If you receive land in 2010 and then sell the land in 2025, do you only owe taxes on the value increase from 2000 to 2025, or on the entire value of the land? How do you determine the value of the land in 2000 when you received it if it wasnt documented at the time?

Trying to make sure what exposures one would have to taxes and whether using a 1031 is worth it to avoid the taxes. If it is simply value from the time you received the land, then that really limits the taxable value.

This wouldn't be an inheritance tax but capital gains. That may help you in your research.

Did you receive the land in 2010 or 2000? You state both. Either way, the cost basis of the land you inherited is reset to fair market value at that time. So you'd pay capital gains on the increase from then to now, less any money spent on improvements.

For determining the value of the land at the time of inheritance, I don't have the answer or know if there are legal requirements. But I'd assume using your realtor to establish a FMV based on that date would suffice.

If there was an estate tax return filed then the value of the land may be listed there. Other methods I have used is to refer to appraisal district valuation from the year of death and contracted out a real estate professionsal with acces to historical values and comps.

You can get a date of death appraisal even if the death occurred many years ago Some people use the value the appraisal district assessed, others find their own comparable sales if they know of any, and some get an appraisal done,

When you are talking capital gains taxes and you say "received land" - it very much depends on how exactly you received it. Did the previous owner die? Was it just deeded to you at no cost / gifted or did you pay something for it?

My understanding is that if it was gifted, then the cost basis would be whatever that person's cost basis was when they acquired the land. For land passed down through gifting for generations and NOT upon death, the cost basis would be nearly zero and you would owe capital gains on the whole thing. If it was passed down to you after the previous owner died, then you get a stepped up basis to whatever fair market value was at the time of death. Obviously a huge difference between the two situations

Good point. Guess when I heard inheritance tax I assumed they passed away and left it the op. Which may not be the case.