Selling Land Before the End of the Year

With just a few weeks left in 2026, many property owners are asking whether to sell now or wait until January. The answer often comes down to taxes, and the closing date is what decides which tax year your sale lands in.

Here are the basics every land and home seller in Arkansas and Oklahoma should know. Then take this list to your CPA.

A sale that closes by December 31, 2026, goes on your 2026 tax return. A sale that closes on January 2, 2027, goes on your 2027 return, which isn’t due until April 2028. If you expect a lower income next year, for example because you are retiring, waiting a few weeks could save money. If this year is the lower year, closing before December 31 may be better.

If you have owned the property for more than one year, any gain is usually taxed at long-term capital gains rates, which are generally lower than regular income tax rates. Inherited property is usually treated as long-term no matter how long you have owned it. Read more in our guide to selling inherited land in Arkansas.

If you have owned and lived in your home for at least two of the last five years, you may be able to exclude up to $250,000 of gain, or $500,000 for married couples filing jointly. If your home sits on acreage, part of the land may qualify along with the house, but extra land used separately, like a hay field you lease out, may not. Ask your CPA how this applies to your property.

If you are selling land or property held for investment or business, such as hunting land, a farm or a rental, a 1031 exchange may let you defer the tax by buying other investment real estate.

• You must identify the replacement property within 45 days of closing.
• You must close on it within 180 days.
• A qualified intermediary must hold the money. Set this up before you close, because once the money touches your hands, the exchange is off.
• Your primary home does not qualify.

Buyers with 1031 money are also out shopping late in the year, which is one more reason winter can be a good time to sell.

Owner financing, also called an installment sale, can spread your gain over several years instead of taking it all at once. It can also attract more buyers. It comes with risk, so have an attorney draw up the paperwork.

Both states have rules that can lower state tax on a property sale. Arkansas taxes only part of long-term capital gains. Oklahoma offers a deduction for gains on Oklahoma real estate held for at least five years. Your CPA can tell you whether you qualify.

• Property taxes. Arkansas property taxes are paid a year behind and are due October 15. At closing, taxes are split between buyer and seller based on the closing date.
• Leases. Hunting, grazing and farm leases may carry over to the buyer, so have copies ready.
• Timber. Selling timber and selling land are taxed differently. Talk to your CPA before you cut timber right before a sale.

It’s possible, but the calendar is tight. Cash sales can close in a few weeks, while financed sales usually take 30 to 60 days, and the holidays slow title work down. If a 2026 closing matters to you, call us now. If January makes more sense, now is the perfect time to get your property evaluated and ready to list after the first of the year.

Does the sale count in 2026 if I sign the contract in December? Usually not. What matters is generally the closing date, when the deed and money change hands. Ask your CPA about your situation.

Can I do a 1031 exchange on hunting land? Often yes, if you held it as an investment and buy other investment real estate. A qualified intermediary has to be set up before closing.

Is it better to sell in January? It depends on your income this year and next year. That’s a question for your CPA, and we can help you plan either date.

This article is general information, not legal or tax advice. Every situation is different, so talk with your CPA or an attorney before you make decisions about your property.