| 1 | 1 | | II |
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| 2 | 2 | | 119THCONGRESS |
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| 3 | 3 | | 1 |
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| 4 | 4 | | STSESSION S. 930 |
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| 5 | 5 | | To amend the Internal Revenue Code of 1986 to exclude from gross income |
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| 6 | 6 | | capital gains from the sale of certain farmland property which are rein- |
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| 7 | 7 | | vested in individual retirement plans. |
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| 8 | 8 | | IN THE SENATE OF THE UNITED STATES |
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| 9 | 9 | | MARCH11 (legislative day, MARCH10), 2025 |
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| 10 | 10 | | Mr. M |
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| 11 | 11 | | CCONNELLintroduced the following bill; which was read twice and |
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| 12 | 12 | | referred to the Committee on Finance |
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| 13 | 13 | | A BILL |
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| 14 | 14 | | To amend the Internal Revenue Code of 1986 to exclude |
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| 15 | 15 | | from gross income capital gains from the sale of certain |
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| 16 | 16 | | farmland property which are reinvested in individual re- |
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| 17 | 17 | | tirement plans. |
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| 18 | 18 | | Be it enacted by the Senate and House of Representa-1 |
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| 19 | 19 | | tives of the United States of America in Congress assembled, 2 |
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| 20 | 20 | | SECTION 1. EXCLUSION OF CERTAIN CAPITAL GAINS FROM 3 |
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| 21 | 21 | | THE SALE OF CERTAIN FARMLAND PROP-4 |
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| 22 | 22 | | ERTY. 5 |
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| 23 | 23 | | (a) I |
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| 24 | 24 | | NGENERAL.—Part III of subchapter B of chap-6 |
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| 25 | 25 | | ter 1 of the Internal Revenue Code of 1986 is amended 7 |
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| 26 | 26 | | by inserting after section 139I the following new section: 8 |
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| 28 | 28 | | ssavage on LAPJG3WLY3PROD with BILLS 2 |
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| 29 | 29 | | •S 930 IS |
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| 30 | 30 | | ‘‘SEC. 139J. GAIN FROM THE SALE OR EXCHANGE OF QUALI-1 |
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| 31 | 31 | | FIED FARMLAND PROPERTY TO QUALIFIED 2 |
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| 32 | 32 | | FARMERS. 3 |
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| 33 | 33 | | ‘‘(a) I |
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| 34 | 34 | | NGENERAL.—If a taxpayer makes an election 4 |
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| 35 | 35 | | under this section and files the agreement referred to in 5 |
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| 36 | 36 | | subsection (d)(2), gross income shall not include so much 6 |
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| 37 | 37 | | of the gain from the sale or exchange of qualified farmland 7 |
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| 38 | 38 | | property to a qualified farmer as does not exceed the ag-8 |
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| 39 | 39 | | gregate amount contributed by the taxpayer to an indi-9 |
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| 40 | 40 | | vidual retirement plan during the 60-day period beginning 10 |
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| 41 | 41 | | on the date of such sale or exchange. 11 |
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| 42 | 42 | | ‘‘(b) Q |
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| 43 | 43 | | UALIFIEDFARMLANDPROPERTY; QUALIFIED 12 |
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| 44 | 44 | | F |
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| 45 | 45 | | ARMER.—For purposes of this section— 13 |
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| 46 | 46 | | ‘‘(1) Q |
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| 47 | 47 | | UALIFIED FARMLAND PROPERTY .—The 14 |
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| 48 | 48 | | term ‘qualified farmland property’ means real prop-15 |
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| 49 | 49 | | erty located in the United States which— 16 |
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| 50 | 50 | | ‘‘(A) has been used by the taxpayer as a 17 |
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| 51 | 51 | | farm for farming purposes, or 18 |
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| 52 | 52 | | ‘‘(B) leased by the taxpayer to a farmer 19 |
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| 53 | 53 | | for farming purposes, 20 |
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| 54 | 54 | | during substantially all of the 10-year period ending 21 |
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| 55 | 55 | | on the date of the qualified sale or exchange. 22 |
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| 56 | 56 | | ‘‘(2) Q |
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| 57 | 57 | | UALIFIED FARMER.—The term ‘qualified 23 |
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| 58 | 58 | | farmer’ means any individual who— 24 |
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| 59 | 59 | | ‘‘(A) is actively engaged in farming (within 25 |
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| 60 | 60 | | the meaning of subsections (b) and (c) of sec-26 |
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| 62 | 62 | | ssavage on LAPJG3WLY3PROD with BILLS 3 |
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| 63 | 63 | | •S 930 IS |
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| 64 | 64 | | tion 1001 of the Food Security Act of 1986 (7 1 |
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| 65 | 65 | | U.S.C. 1308–1(b) and (c))), and 2 |
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| 66 | 66 | | ‘‘(B) is designated in an agreement under 3 |
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| 67 | 67 | | subsection (d)(2). 4 |
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| 68 | 68 | | ‘‘(c) T |
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| 69 | 69 | | AXTREATMENT OF FURTHERDISPOSITIONS 5 |
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| 70 | 70 | | ORNON-FARMUSE.— 6 |
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| 71 | 71 | | ‘‘(1) I |
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| 72 | 72 | | N GENERAL.—If, within 10 years after 7 |
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| 73 | 73 | | the date of the sale or exchange— 8 |
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| 74 | 74 | | ‘‘(A) the qualified farmer disposes of any 9 |
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| 75 | 75 | | interest in qualified farmland property, or 10 |
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| 76 | 76 | | ‘‘(B) the qualified farmer ceases to use the 11 |
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| 77 | 77 | | qualified farmland property as a farm for farm-12 |
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| 78 | 78 | | ing purposes, 13 |
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| 79 | 79 | | then, in addition to any other tax, there is hereby 14 |
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| 80 | 80 | | imposed for the taxable year of such disposition or 15 |
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| 81 | 81 | | cease in use, a tax in the amount determined under 16 |
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| 82 | 82 | | paragraph (2). 17 |
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| 83 | 83 | | ‘‘(2) A |
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| 84 | 84 | | MOUNT OF TAX.—The amount of tax de-18 |
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| 85 | 85 | | termined under this paragraph is an amount equal 19 |
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| 86 | 86 | | to the sum of— 20 |
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| 87 | 87 | | ‘‘(A) the product of— 21 |
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| 88 | 88 | | ‘‘(i) the amount excluded from the 22 |
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| 89 | 89 | | gross income under subsection (a), and 23 |
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| 90 | 90 | | ‘‘(ii) the sum of— 24 |
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| 92 | 92 | | ssavage on LAPJG3WLY3PROD with BILLS 4 |
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| 93 | 93 | | •S 930 IS |
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| 94 | 94 | | ‘‘(I) the highest rate of tax on 1 |
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| 95 | 95 | | adjusted net capital gain under sec-2 |
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| 96 | 96 | | tion 1(h), plus 3 |
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| 97 | 97 | | ‘‘(II) the rate of tax applicable 4 |
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| 98 | 98 | | under section 1411, plus 5 |
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| 99 | 99 | | ‘‘(B) interest at the underpayment rate es-6 |
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| 100 | 100 | | tablished under section 6621 on the amount de-7 |
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| 101 | 101 | | termined under subparagraph (A) for each 8 |
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| 102 | 102 | | prior taxable year for the period beginning with 9 |
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| 103 | 103 | | the taxable year in which the sale or exchange 10 |
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| 104 | 104 | | occurred. 11 |
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| 105 | 105 | | ‘‘(3) L |
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| 106 | 106 | | IABILITY FOR TAX.—The qualified farm-12 |
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| 107 | 107 | | er shall be personally liable for the additional tax 13 |
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| 108 | 108 | | imposed by this subsection. 14 |
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| 109 | 109 | | ‘‘(4) P |
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| 110 | 110 | | ARTIAL DISPOSITIONS.— For purposes of 15 |
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| 111 | 111 | | this subsection, where the qualified farmer disposes 16 |
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| 112 | 112 | | of a portion of the qualified farmland acquired by 17 |
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| 113 | 113 | | such qualified farmer or there is a cessation of use 18 |
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| 114 | 114 | | of such a portion as a farm for farming purposes, 19 |
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| 115 | 115 | | the amount determined under paragraph (2)(A)(i) 20 |
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| 116 | 116 | | shall be the amount which bears the same ratio the 21 |
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| 117 | 117 | | amount otherwise determined under such paragraph 22 |
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| 118 | 118 | | as— 23 |
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| 119 | 119 | | ‘‘(A) the portion of the qualified farmland 24 |
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| 120 | 120 | | so disposed or ceased to be used, bears to 25 |
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| 122 | 122 | | ssavage on LAPJG3WLY3PROD with BILLS 5 |
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| 123 | 123 | | •S 930 IS |
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| 124 | 124 | | ‘‘(B) the entire amount of the qualified 1 |
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| 125 | 125 | | farmland so acquired. 2 |
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| 126 | 126 | | ‘‘(d) E |
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| 127 | 127 | | LECTION.— 3 |
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| 128 | 128 | | ‘‘(1) I |
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| 129 | 129 | | N GENERAL.—An election under sub-4 |
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| 130 | 130 | | section (a) shall be made at such time and in such 5 |
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| 131 | 131 | | form and manner as the Secretary shall prescribe. 6 |
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| 132 | 132 | | Such an election, once made, shall be irrevocable. 7 |
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| 133 | 133 | | ‘‘(2) A |
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| 134 | 134 | | GREEMENT.—The agreement referred to 8 |
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| 135 | 135 | | in this paragraph is a written agreement signed by 9 |
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| 136 | 136 | | the qualified farmer designated in such agreement 10 |
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| 137 | 137 | | consenting to the application of subsection (c) with 11 |
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| 138 | 138 | | respect to the qualified farmland property. Such 12 |
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| 139 | 139 | | agreement shall include a statement indicating the 13 |
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| 140 | 140 | | amount described in subsection (c)(2)(A)(i). 14 |
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| 141 | 141 | | ‘‘(e) D |
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| 142 | 142 | | EFINITIONS ANDSPECIALRULES.—For pur-15 |
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| 143 | 143 | | poses of this section— 16 |
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| 144 | 144 | | ‘‘(1) F |
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| 145 | 145 | | ARM; FARMING PURPOSES .—For pur-17 |
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| 146 | 146 | | poses of this section, the terms ‘farm’ and ‘farming 18 |
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| 147 | 147 | | purposes’ have the respective meanings given such 19 |
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| 148 | 148 | | terms under section 2032A(e). 20 |
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| 149 | 149 | | ‘‘(2) S |
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| 150 | 150 | | TATUTE OF LIMITATIONS .—If qualified 21 |
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| 151 | 151 | | farmland property is disposed of or ceases to be used 22 |
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| 152 | 152 | | as a farm for farming purposes, then— 23 |
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| 153 | 153 | | ‘‘(A) the statutory period for the assess-24 |
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| 154 | 154 | | ment of any tax under subsection (c) attrib-25 |
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| 156 | 156 | | ssavage on LAPJG3WLY3PROD with BILLS 6 |
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| 157 | 157 | | •S 930 IS |
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| 158 | 158 | | utable to such disposition or cessation shall not 1 |
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| 159 | 159 | | expire before the expiration of 3 years from the 2 |
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| 160 | 160 | | date the Secretary is notified (in such manner 3 |
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| 161 | 161 | | as the Secretary may by regulations prescribe) 4 |
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| 162 | 162 | | of such disposition or cessation, and 5 |
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| 163 | 163 | | ‘‘(B) such tax may be assessed before the 6 |
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| 164 | 164 | | expiration of such 3-year period notwith-7 |
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| 165 | 165 | | standing the provisions of any other law or rule 8 |
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| 166 | 166 | | of law which would otherwise prevent such as-9 |
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| 167 | 167 | | sessment. 10 |
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| 168 | 168 | | ‘‘(3) I |
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| 169 | 169 | | NVOLUNTARY CONVERSIONS AND LIKE - 11 |
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| 170 | 170 | | KIND EXCHANGES.— 12 |
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| 171 | 171 | | ‘‘(A) I |
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| 172 | 172 | | NVOLUNTARY CONVERSIONS .—Under 13 |
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| 173 | 173 | | regulations provided by the Secretary, no tax 14 |
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| 174 | 174 | | shall be imposed under subsection (c) if there is 15 |
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| 175 | 175 | | an involuntary conversion (within the meaning 16 |
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| 176 | 176 | | of section 2032A(h)(3) of an interest in quali-17 |
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| 177 | 177 | | fied farmland property. 18 |
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| 178 | 178 | | ‘‘(B) L |
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| 179 | 179 | | IKE-KIND EXCHANGES.—Rules simi-19 |
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| 180 | 180 | | lar to the rules of section 2032A(i) shall apply 20 |
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| 181 | 181 | | where qualified farmland property is disposed of 21 |
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| 182 | 182 | | in a transaction which qualifies under section 22 |
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| 183 | 183 | | 1031. 23 |
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| 184 | 184 | | ‘‘(4) N |
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| 185 | 185 | | O DOUBLE BENEFIT .—No deduction 24 |
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| 186 | 186 | | shall be allowed under section 219 with respect so 25 |
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| 188 | 188 | | ssavage on LAPJG3WLY3PROD with BILLS 7 |
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| 189 | 189 | | •S 930 IS |
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| 190 | 190 | | much of the qualified retirement contributions for 1 |
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| 191 | 191 | | the taxable year as does not exceed the amount ex-2 |
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| 192 | 192 | | cluded from income under subsection (a).’’. 3 |
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| 193 | 193 | | (b) W |
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| 194 | 194 | | AIVER OFCONTRIBUTIONLIMITATION.—Sec-4 |
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| 195 | 195 | | tion 408 of the Internal Revenue Code of 1986 is amended 5 |
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| 196 | 196 | | by redesignating subsection (r) as subsection (s) and by 6 |
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| 197 | 197 | | inserting after subsection (q) the following new subsection: 7 |
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| 198 | 198 | | ‘‘(r) I |
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| 199 | 199 | | NCREASEDLIMITATION FORCONTRIBUTIONS 8 |
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| 200 | 200 | | OFQUALIFIEDFARMLANDGAIN.— 9 |
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| 201 | 201 | | ‘‘(1) I |
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| 202 | 202 | | N GENERAL.—For purposes of applying 10 |
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| 203 | 203 | | subsections (a)(1) and (b)(2)(B), the amount in ef-11 |
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| 204 | 204 | | fect under section 219(b)(1)(A) for any taxable year 12 |
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| 205 | 205 | | shall be increased by the lesser of— 13 |
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| 206 | 206 | | ‘‘(A) the aggregate amount of gain by the 14 |
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| 207 | 207 | | taxpayer from the sale or exchange of qualified 15 |
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| 208 | 208 | | farmland property to a qualified farmer during 16 |
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| 209 | 209 | | the period beginning 60 days before the first 17 |
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| 210 | 210 | | day of such taxable year and ending with the 18 |
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| 211 | 211 | | last day of such taxable year, or 19 |
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| 212 | 212 | | ‘‘(B) the amount contributed during the 20 |
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| 213 | 213 | | 60-day period ending with such sale or ex-21 |
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| 214 | 214 | | change to individual retirement plans of the 22 |
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| 215 | 215 | | taxpayer. 23 |
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| 217 | 217 | | ssavage on LAPJG3WLY3PROD with BILLS 8 |
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| 218 | 218 | | •S 930 IS |
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| 219 | 219 | | ‘‘(2) DEFINITIONS.—Any term used in this sec-1 |
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| 220 | 220 | | tion which is used in section 139J shall have the 2 |
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| 221 | 221 | | meaning given such term under such section.’’. 3 |
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| 222 | 222 | | (c) C |
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| 223 | 223 | | LERICALAMENDMENT.—The table of sections 4 |
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| 224 | 224 | | for part III of subchapter B of chapter 1 of the Internal 5 |
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| 225 | 225 | | Revenue Code of 1986 is amended by inserting after the 6 |
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| 226 | 226 | | item relating to section 139I the following new item: 7 |
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| 227 | 227 | | ‘‘Sec. 139J. Gain from the sale or exchange of qualified farmland property to |
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| 228 | 228 | | qualified farmers.’’. |
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| 229 | 229 | | (d) EFFECTIVEDATE.—The amendments made by 8 |
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| 230 | 230 | | this section shall apply to sales or exchanges in taxable 9 |
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| 231 | 231 | | years beginning after the date of the enactment of this 10 |
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| 232 | 232 | | Act. 11 |
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| 233 | 233 | | Æ |
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| 235 | 235 | | ssavage on LAPJG3WLY3PROD with BILLS |
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