The Department of the Treasury and the Internal Revenue Service (IRS) have issued proposed regulations for taxpayers who sell or exchange qualifying farmland to qualified farmers and elect to pay the tax on the gain in four equal annual installments.
Section 1062 of the Internal Revenue Code allows eligible taxpayers to spread payment of the tax attributable to gain from certain sales or exchanges of farmland over four years. The election applies to qualified sales or exchanges made in taxable years beginning after July 4, 2025.
“Farmers should have practical options when farmland is sold,” said IRS CEO Frank Bisignano. “The Working Families Tax Cuts helps keep farmland in agricultural use by allowing eligible sellers to spread their tax payments over four years when qualifying property is sold to active farmers.”
To qualify, the farmland must be real property located in the United States that was generally used by the taxpayer for farming purposes, or l
