26 USC 1062 - Gain from the sale or exchange of qualified farmland property to qualified farmers

U.S Code last checked for updates: Aug 16, 2025

§ 1062.

Gain from the sale or exchange of qualified farmland property to qualified farmers

(a)

Election to pay tax in installments

(b)

Rules relating to installment payments

(1)

Date for payment of installments

(2)

Acceleration of payment

(A)

In general

(B)

Individuals

(C)

C corporations

(3)

Proration of deficiency to installments

(c)

Election

(1)

In general

(2)

Partnerships and S corporations

(d)

Definitions

For purposes of this section—

(1)

Applicable net tax liability

(A)

In general

The applicable net tax liability with respect to the sale or exchange of any property described in subsection (a) is the excess (if any) of—

(i)

such taxpayer’s net income tax for the taxable year, over

(ii)

such taxpayer’s net income tax for such taxable year determined without regard to any gain recognized from the sale or exchange of such property.

(B)

Net income tax

(2)

Qualified farmland property

(A)

In general

The term “qualified farmland property” means real property located in the United States—

(i)

which—

(I)

has been used by the taxpayer as a farm for farming purposes, or

(II)

leased by the taxpayer to a qualified farmer for farming purposes,

during substantially all of the 10-year period ending on the date of the qualified sale or exchange, and

(ii)

which is subject to a covenant or other legally enforceable restriction which prohibits the use of such property other than as a farm for farming purposes for any period before the date that is 10 years after the date of the sale or exchange described in subsection (a).

For purposes of clause (i), property which is used or leased by a partnership or S corporation in a manner described in such clause shall be treated as used or leased in such manner by each person who holds a direct or indirect interest in such partnership or S corporation.

(B)

Farm; farming purposes

(3)

Qualified farmer

(e)

Return requirement

(Added Pub. L. 119–21, title VII, § 70437(a), July 4, 2025, 139 Stat. 248.)

cite as: 26 USC 1062