If you sold farm property, and the farm was insolvent at the time, you may not have to pay Minnesota income tax on some of the profit from the sale. You may be able to subtract some of the profit from your Minnesota taxable income.
Do I qualify for this subtraction?
To qualify, all of the following must be true:
You owned and operated the farm.
Your debts were greater than the fair market value of your assets immediately before the sale.
The gain from the sale was included in your federal adjusted gross income on federal Form 1040.
You applied the sale proceeds to paying off the mortgage, contract for deed, or any liens on the property.
Note: “Farm property” includes agricultural production property, other real property, or equipment used in a farm business that you owned and operated.
How do I claim this subtraction?