Hi,We recently (Aug 2024) bought commercial land of around 2 acres. this was part of bigger commercial lot (around 25 acres) which had AG exemption and so the taxes that they paid was around $20 each year. we received a 'AG ROLLBACK' letter from the appraisal district that starting 2025 tax year, we will be taxed at it market value resulting in additional taxes, interest and possible penalities for 3 prior years.

Yes, do the tax exchange if you can.  

Hi Steve, where did you get your property tax estimate from?

@Jeanette LandI always recommend using a tax professional.

A short sale might be an option if the seller’s lender agrees to take less than what’s owed.

Any advice on what setup is easiest and most tax advantaged?

@Drake BackmanBigger Pockets is a great place to find a tax strategist specializing in real estate taxation.A good real estate tax strategist can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.I recommend finding a tax  strategist specializing in real estate taxation, business taxation, financial planning and tax planning.Consider working with your tax strategist remotely to expand your options.I would also recommend looking for a tax strategist willing to work with you throughout the year.

Sure you’ll be taxed on it.

What paperwork should I keep a paper trail of to make things like taxes and other situations better/easier for myself?

In the unfortunate event someone passes away and the property transfers via probate or a will, that fair market price gets "stepped up" so no taxes are paid.I would check with a CPA, but this is my understanding.