Where the Dirt Sits Can Change Your State Tax Bill by Six Figures
Some states allow a full deduction for the sale of farmland
Federal capital gain rules are the same in all 50 states. State rules are not. Most farmers assume the state tax on a land sale is just the state rate times the gain. In more than a dozen states that is flat wrong, and the difference is real money.
Here is a $2 million gain on farmland and what the state takes in six different places:
Same gain. Same ground. Six different answers.
The states that can wipe it out entirely
