S. 930 · Where this bill is now
In committee
Introduced in the Senate, Mar 11, 2025
What this bill does
In plain words · AI-written from the official summaryFarmland sales get tax break through retirement accounts
This bill lets farmers avoid paying federal capital gains tax when they sell farmland and put the money into an individual retirement account (IRA) within 60 days. The catch: the buyer has to be an active farmer who agrees in writing to keep using the land for farming for at least 10 years, or they'll owe back taxes plus interest.
How it affects you
If you're a farmer selling farmland to another farmer, this could reduce your federal taxes on that sale. If you're the farmer buying the land, you'd need to commit to farming it for a decade or face a tax penalty.
Read the official summary (Introduced in Senate, Mar 11, 2025)
This bill excludes from gross income the gain from the sale or exchange of qualified farmland property to a qualified farmer that is contributed to an individual retirement account (IRA). This generally prevents the federal capital gains tax from being imposed on such gain. (Conditions apply.)
Specifically, the bill excludes from gross income any gain from the sale or exchange of qualified farmland property contributed to an IRA within 60 days of the sale or exchange if
• the requisite election is made,
• the property is sold to an individual actively engaged in farming (qualified farmer),
• the qualified farmer signs a written agreement consenting to the application of a federal tax if the property is disposed of or no longer used for farming within the first 10 years after the sale or exchange, and
• the written agreement is filed.
The bill defines qualified farmland property as real property located in the United States that, for substantially all of the 10 years preceding the sale or exchange, is used by the farmer (or lessee) for farming purposes.
However, under the bill, if the qualified farmland property is disposed of or no longer used for farming within the first 10 years after the sale or exchange, a tax is imposed on the qualified farmer equal to the amount excluded from gross income multiplied by the sum of the highest tax rate on adjusted net capital gains and the net investment income tax rate (currently 23.8%), plus interest.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 930
A BILL
A bill to amend the Internal Revenue Code of 1986 to exclude from gross income capital gains from the sale of certain farmland property which are reinvested in individual retirement plans.
Sponsor: Sen. Mitch McConnell (R-KY) · Introduced Mar 11, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Mar 11, 2025: “Read twice and referred to the Committee on Finance.”