Each year many farm families sell or dispose of some of their farm business assets. Typical sales vary from crops that had been inventoried to dairy cows and breeding livestock. The sales of all livestock, machinery, land, and buildings by farm families are not a common annual occurrence. Most farmers are not fully aware of the income tax consequences of major sales. Many are shocked by the magnitude of their income tax bills after they have sold the farm and some do not have the resources to pay them. Sales or dispositions resulting from low profitability, negative returns, and the inability to make payments are extremely difficult for farmers to manage. Additional financial burdens such as income taxes compound the decision making process and add to family stress. Farm families need to be well informed of the income tax consequences of property dispositions so the shock and stress caused by unexpected tax bills can be avoided. Following are some basic income tax myths, truths, and examples that will enable the farm owner to be better informed of many of the most important income tax management opportunities and rules affecting farm property sales.