Q: Upon my mother’s death in 1998, my siblings and I inherited a 268-acre farm in South Georgia. The land originally belonged to my great-grandfather. For a few years we held the land in a limited partnership and split the income.

The farm (zoned A-5) has no structures, and was “rented” to a professional farmer who paid us a lump sum each year. My life situation led me to realize I needed to liquidate my portion.

We dissolved the partnership and had the land surveyed into 3 separate farms. My siblings kept theirs as farms. I put land on the market. After 2 years, a developer put a contract on it. The rezoning (to R-25) and county approval has been done. We are going to close in 3 weeks.

What are the tax implications for me?

A: When you inherited the farm, you inherited it at its value on the day of your mother’s death. Did the estate hire an appraiser to value the property? There should have been some sort of valuation made for the IRS at the time that the estate tax return was filed.

If an appraisal or estimate of value wasn’t done around the time of your mother’s death, you will have to spend some time try to have a professional estimate what the land probably would have been worth at the time, based on the sales of other properties in the area then.

Since you already have an offer on the land, you now know what it is worth in today’s market. Unless you lived on the land (and I can tell that you didn’t from the information in your letter), the farm is an investment that you have owned for a long time. You would owe long-term capital gains tax on the profit, which is the difference between the value on the day you inherited the property and the value you are selling it for, minus any costs of sale (such as the broker’s commission). You’ll also likely owe state income taxes.

Typically, if you own investment property for less than a year, you’d pay a short-term capital gains tax, which is your marginal tax rate (up to 35 percent) plus state income taxes. But when it comes to inherited property, the IRS allows you to pay long-term capital gains tax, even if you flipped the property the day after you inherited it. The IRS treats all inherited property as if you had held it for more than 12 months.

For more details, please talk to your tax preparer or estate attorney.