Selling Land to Buy an Annuity?

Q. I have some neighbors that are elderly and getting ready to sell 110 acres of land. I know about the 1030 exchange for other land, but they want to invest in an annuity. Will they have to pay taxes on the profit from the land? Is there anything they can do to not pay taxes? Thanks

A. Good question. Yes, they will have to pay capital gains taxes on the sale of the land.

Moreover, you need to strongly caution them on buying an annuity. There are many charlatans scamming elderly seniors into selling property and putting the money into annuities that pay commissions of 10% to the agent while locking the money up for the investor.

If at all possible, find out what annuity is being recommended. As was stated in the Wall Street Journal this morning, there is ANY reason for someone 65 years or older to be in an annuity as an investment unless it is what is called an immediate annuity where you get automatic monthly payments like a pension.

That's not what this couple is being sold.

They need to be very, very, very skeptical. They are about to be taken.

I will help in any way I can.

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