26 U.S.C. § 1252
§ 1252. Gain from disposition of farm land
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
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—
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
the excess of—
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
the adjusted basis of such land,
shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle.
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).
For purposes of this section—
| If the farm land is disposed of— | The applicable 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. |
Under regulations prescribed by the Secretary, rules similar to the rules of section 1245 shall be applied for purposes of this section.