Sec. 1252. Gain From Disposition Of Farm Land

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1. IRC
2. Subtitle A
3. Chapter 1
4. Subchapter P
5. Part IV
6. § 1252

Sec. 1252. Gain From Disposition Of Farm Land I.R.C. § 1252(a) General Rule I.R.C. § 1252(a)(1) Ordinary Income — Except as otherwise provided in this section, if farm land which the taxpayer has held for less than 10 years is disposed of, the lower of— I.R.C. § 1252(a)(1)(A) — the applicable percentage of the aggregate of the deductions allowed under section 175 (relating to soil and water conservation expenditures) for expenditures made by the taxpayer with respect to the farm land or I.R.C. § 1252(a)(1)(B) — the excess of— I.R.C. § 1252(a)(1)(B)(i) — the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of the farm land (in the case of any other disposition), over I.R.C. § 1252(a)(1)(B)(ii) — the adjusted basis of such land, shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle. I.R.C. § 1252(a)(2) Farm Land — For purposes of this section, the term “farm land" means any land with respect to which deductions have been allowed under section 175 (relating to soil and water conservation expenditures). I.R.C. § 1252(a)(3) Applicable Percentage — For purposes of this section— The applicable If the farm land is disposed of-- percentage is-- Within 5 years after the date it was acquired......100 percent. Within the sixth year after it was acquired........ 80 percent. Within the seventh year after it was acquired...... 60 percent. Within the eighth year after it was acquired....... 40 percent. Within the ninth year after it was acquired........ 20 percent. 10 years or more years after it was acquired....... 0 percent. I.R.C. § 1252(b) Special Rules — Under regulations prescribed by the Secretary, rules similar to the rules of section 1245 shall be applied for purposes of this section. (Added by Pub. L. 91-172, title II, 214(a), Dec. 30, 1969, 83 Stat. 572, and amended by Pub. L. 94-455, title XIX, 1901(b)(3)(K), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834; Pub. L. 98-369, div. A, title IV, 492(b)(5), July 18, 1984, 98 Stat. 854; Pub. L. 99-514, title IV, 402(b)(2), Oct. 22, 1986, 100 Stat. 2221; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(85), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-141, Div. U, title IV, Sec. 401(b)(32), Mar. 23, 2018, 132 Stat. 348.) BACKGROUND NOTES AMENDMENTS 2018--Subsec. (a)(1). Pub. L. 115-141, Div. U, Sec. 401(b)(32)(A), amended par. (1) by striking ‘‘during a taxable year beginning’’. Subsec. (a)(1)(A). Pub. L. 115-141, Div. U, Sec. 401(b)(32)(B)(i), amended subpar. (A) by substituting “section” for “sections”. Subsec. (a)(1)(A). Pub. L. 115-141, Div. U, Sec. 401(b)(32)(B)(ii), amended subpar. (A) by substituting “for expenditures” for “and 182 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986) for expenditures”. Subsec. (a)(2), Pub. L. 115-141, Div. U, Sec. 401(b)(32)(C)(i), amended subpar. (2) by substituting “section” for “sections”. Subsec. (a)(2), Pub. L. 115-141, Div. U, Sec. 401(b)(32)(C)(ii), amended subpar. (2) by striking “or 182 (relating to expenditures by farmers for clearing land)”. 2014--Subsec. (a)(1). Pub. L. 113-295, Div. A, Sec. 221(a)(85), amended par. (1) by striking “after December 31, 1969” the first place it appeared and by striking “after December 31, 1969,” in subpar. (A). 1986--Subsec. (a)(1)(A). Pub. L. 99-514 substituted “(as in effect on the day before the date of the enactment of the Tax Reform Act of 1986)” for “(relating to expenditures by farmers for clearing land)”. 1984--Subsec. (a)(1). Pub. L. 98-369 struck out “,except that this section shall not apply to the extent section 1251 applies to such gain” after “of this subtitle” in last sentence. 1976--Subsec. (a)(1). Pub. L. 94-455, 1901(b)(3)(K), substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”. Subsec. (b). Pub. L. 94-455, 1906(b)(13)(A), struck out “or his delegate" after “Secretary”. EFFECTIVE DATE OF 2018 AMENDMENTS Amendments by Pub. L. 115-141, Div. U, Sec. 401(b)(32), effective March 23, 2018. Sec. 401(e) of Pub. L. 115-141, Div. U, provided the following Savings Provision: “(e) General Savings Provision With Respect To Deadwood Provisions.—If— “(1) any provision amended or repealed by the amendments made by subsection (b) or (d) applied to— “(A) any transaction occurring before the date of the enactment of this Act, “(B) any property acquired before such date of enactment, or “(C) any item of income, loss, deduction, or credit taken into account before such date of enactment, and “(2) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by such subsection) affect the liability for tax for periods ending after such date of enactment, “nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.” EFFECTIVE DATE OF 2014 AMENDMENTS Amendments by Pub. L. 113-295, Div. A, Sec. 221(a)(85), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014]. Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision: “(2) SAVINGS PROVISION.—If— “(A) any provision amended or repealed by the amendments made by this section applied to— “(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014], “(ii) any property acquired before such date of enactment, or “(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and “(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.” EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-514 applicable to amounts paid or incurred after Dec. 31, 1985, in taxable years ending after such date, see section 402(c) of Pub. L. 99-514, set out as an Effective Date of Repeal note under former section 182 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-369 applicable to taxable years beginning after Dec. 31, 1983, see section 492(d) of Pub. L. 98-369, set out as a note under section 170 of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by section 1901(b)(3)(K) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title. EFFECTIVE DATE Section 214(c) of Pub. L. 91-172 provided that: “The amendments made by this section [enacting this section] shall apply to taxable years beginning after December 31, 1969.”

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