Checkout Your Options Before Selling Your Land By Christine Macguire At Isnare.com Ezine Articles

To dispose off a real estate is a one of the major tasks that one has to carry with due responsibility. Of all the real estate assets, land is usually the most valuable. Land plots have always been objects of purchase, sale or bargain. The number of transactions with land plots is huge and still growing on a daily basis throughout the nation. One of the dominant factors here is the rising price of land plots in the capital and suburbs.

People do tend to retain their land ownership viewing it as security that can be a valuable part of a diversified array of retirement asset. They don’t even want to face the inconvenience of dealing with rental contracts including establishing and collecting rents, repair and maintenance, and the liability exposure. Some are fearful that land values (rents) will fall and real estate taxes will increase, leaving them with less and less income. Others fear land values will rise and increase their estate taxes.

If you decide to sell your land and/or building there are several ways to accomplish this.

· Sell it for cash: Sell your land for cash in a lump sum and as a consequence you have to pay all the accompanying income taxes. It is advisable to resort to this mode of sale only when you are in an urgent need of funds and your land is the only asset left to dispose off.

· Sell it on a contract for deed: A land contract puts you in the position of a lender. As the contract payments are made, you include them in your taxable income over a number of years. By signing a land contract deed with installment sale reporting, you do obligate yourself or your heirs to paying the income tax on the gain. At times selling on a contract provides the buyer with a source of credit and terms he or she can afford. However the buyer is liable to pay you a lot of interest over the life of the contract. And again the interest you receive from the buyer is fully taxable to you. If you become a contract for deed holder, you assume the risk of default by the buyer. You may get your land back through forfeiture or you may be forced to foreclose on the party in default.

· Sell your land piecemeal: You can also sell your land piecemeal that is bit by bit at a time, as the buyer can afford to purchase it. Using this method, the buyer can apply all purchase money to principal and none to interest. Land Developers are eager to find owners willing to sell land piecemeal because the owners are often eager to get rid of it - especially if it was purchased at the height of the market. In fact, some owners have even let parcels revert back to the previous owner if development wasn't feasible.

· Consider a tax-free exchange: Exchanging like-kind property can postpone your taxation of capital gains. Section 1031 of the Internal Revenue Code (IRC) offers real estate buyers and sellers a golden opportunity to defer their taxes on capital gains if they reinvest the proceeds to purchase of like-kind property. Properties are believed to be of a like-kind if the property acquired is alike in nature and situated in the United States. If you are to qualify for a 1031 exchange the transaction has to be done in accordance to the exchange rules set forth in the tax code and the treasury regulations.

Seeking professional advice and assistance from established real estate agencies when you want to sell your land is undoubtedly the best approach. Real estate agents can provide many useful services and work with you in different ways. They provide the landowners the best approach to selling their real estate at fair market value. With access to a large network of land investors, developers and homebuilders they are able to offer the best price in the real estate market for your valuable real estate asset.

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