119-s930

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 930 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 930

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.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 March 11 (legislative day, March 10), 2025

 Mr. McConnell introduced the following bill; which was read twice and 
 referred to the Committee on Finance

_______________________________________________________________________

 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.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXCLUSION OF CERTAIN CAPITAL GAINS FROM THE SALE OF CERTAIN 
 FARMLAND PROPERTY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after 

section 139I the following new section:

``

SEC. 139J. GAIN FROM THE SALE OR EXCHANGE OF QUALIFIED FARMLAND 
 PROPERTY TO QUALIFIED FARMERS.

 ``

    (a) In General.--If a taxpayer makes an election under this 
section and files the agreement referred to in subsection
            (d) (2) , gross 
income shall not include so much of the gain from the sale or exchange 
of qualified farmland property to a qualified farmer as does not exceed 
the aggregate amount contributed by the taxpayer to an individual 
retirement plan during the 60-day period beginning on the date of such 
sale or exchange.
 ``

    (b) Qualified Farmland Property; Qualified Farmer.--For purposes 
of this section--
 ``

    (1) Qualified farmland property.--The term `qualified 
 farmland property' means real property located in the United 
 States which--
 ``
        (A) has been used by the taxpayer as a farm for 
 farming purposes, or
 ``
        (B) leased by the taxpayer to a farmer for 
 farming purposes,
 during substantially all of the 10-year period ending on the 
 date of the qualified sale or exchange.
 ``

    (2) Qualified farmer.--The term `qualified farmer' means 
 any individual who--
 ``
        (A) is actively engaged in farming (within the 
 meaning of subsections

    (b) and
            (c) of 

section 1001 of 
 the Food Security Act of 1986 (7 U.S.C. 1308-1

    (b) and
            (c) )), and
 ``
        (B) is designated in an agreement under 
 subsection
            (d) (2) .
 ``
            (c) Tax Treatment of Further Dispositions or Non-Farm Use.--
 ``

    (1) In general.--If, within 10 years after the date of 
 the sale or exchange--
 ``
        (A) the qualified farmer disposes of any interest 
 in qualified farmland property, or
 ``
        (B) the qualified farmer ceases to use the 
 qualified farmland property as a farm for farming 
 purposes,
 then, in addition to any other tax, there is hereby imposed for 
 the taxable year of such disposition or cease in use, a tax in 
 the amount determined under paragraph

    (2) .
 ``

    (2) Amount of tax.--The amount of tax determined under 
 this paragraph is an amount equal to the sum of--
 ``
        (A) the product of--
 ``
            (i) the amount excluded from the gross 
 income under subsection

    (a) , and
 ``
            (ii) the sum of--
 ``
            (I) the highest rate of tax on 
 adjusted net capital gain under 

section 1

    (h) , plus
 ``
            (II) the rate of tax applicable 
 under 

section 1411, plus
 ``
        (B) interest at the underpayment rate established 
 under 

section 6621 on the amount determined under 
 subparagraph
        (A) for each prior taxable year for the 
 period beginning with the taxable year in which the 
 sale or exchange occurred.
 ``

    (3) Liability for tax.--The qualified farmer shall be 
 personally liable for the additional tax imposed by this 
 subsection.
 ``

    (4) Partial dispositions.-- For purposes of this 
 subsection, where the qualified farmer disposes of a portion of 
 the qualified farmland acquired by such qualified farmer or 
 there is a cessation of use of such a portion as a farm for 
 farming purposes, the amount determined under paragraph

    (2)
        (A)
            (i) shall be the amount which bears the same ratio the 
 amount otherwise determined under such paragraph as--
 ``
        (A) the portion of the qualified farmland so 
 disposed or ceased to be used, bears to
 ``
        (B) the entire amount of the qualified farmland 
 so acquired.
 ``
            (d) Election.--
 ``

    (1) In general.--An election under subsection

    (a) shall 
 be made at such time and in such form and manner as the 
 Secretary shall prescribe. Such an election, once made, shall 
 be irrevocable.
 ``

    (2) Agreement.--The agreement referred to in this 
 paragraph is a written agreement signed by the qualified farmer 
 designated in such agreement consenting to the application of 
 subsection
            (c) with respect to the qualified farmland property. 
 Such agreement shall include a statement indicating the amount 
 described in subsection
            (c) (2)
        (A)
            (i) .
 ``

    (e) Definitions and Special Rules.--For purposes of this 
section--
 ``

    (1) Farm; farming 

=== purposes ===
-For purposes of this 
 section, the terms `farm' and `farming purposes' have the 
 respective meanings given such terms under 

section 2032A

    (e) .
 ``

    (2) Statute of limitations.--If qualified farmland 
 property is disposed of or ceases to be used as a farm for 
 farming purposes, then--
 ``
        (A) the statutory period for the assessment of 
 any tax under subsection
            (c) attributable to such 
 disposition or cessation shall not expire before the 
 expiration of 3 years from the date the Secretary is 
 notified (in such manner as the Secretary may by 
 regulations prescribe) of such disposition or 
 cessation, and
 ``
        (B) such tax may be assessed before the 
 expiration of such 3-year period notwithstanding the 
 provisions of any other law or rule of law which would 
 otherwise prevent such assessment.
 ``

    (3) Involuntary conversions and like-kind exchanges.--
 ``
        (A) Involuntary conversions.--Under regulations 
 provided by the Secretary, no tax shall be imposed 
 under subsection
            (c) if there is an involuntary 
 conversion (within the meaning of 

section 2032A

    (h)

    (3) of an interest in qualified farmland property.
 ``
        (B) Like-kind exchanges.--Rules similar to the 
 rules of 

section 2032A
            (i) shall apply where qualified 
 farmland property is disposed of in a transaction which 
 qualifies under 

section 1031.
 ``

    (4) No double benefit.--No deduction shall be allowed 
 under 

section 219 with respect so much of the qualified 
 retirement contributions for the taxable year as does not 
 exceed the amount excluded from income under subsection

    (a) .''.

    (b) Waiver of Contribution Limitation.--

Section 408 of the Internal 
Revenue Code of 1986 is amended by redesignating subsection

    (r) as 
subsection

    (s) and by inserting after subsection

    (q) the following new 
subsection:
 ``

    (r) Increased Limitation for Contributions of Qualified Farmland 
Gain.--
 ``

    (1) In general.--For purposes of applying subsections

    (a)

    (1) and

    (b)

    (2)
        (B) , the amount in effect under 

section 219

    (b)

    (1)
        (A) for any taxable year shall be increased by the 
 lesser of--
 ``
        (A) the aggregate amount of gain by the taxpayer 
 from the sale or exchange of qualified farmland 
 property to a qualified farmer during the period 
 beginning 60 days before the first day of such taxable 
 year and ending with the last day of such taxable year, 
 or
 ``
        (B) the amount contributed during the 60-day 
 period ending with such sale or exchange to individual 
 retirement plans of the taxpayer.
 ``

    (2) === Definitions. ===
-Any term used in this section which is 
 used in 

section 139J shall have the meaning given such term 
 under such section.''.
            (c) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after the item relating to 

section 139I the 
following new item:

``

Sec. 139J. Gain from the sale or exchange of qualified farmland 
 property to qualified farmers.''.
            (d) Effective Date.--The amendments made by this section shall 
apply to sales or exchanges in taxable years beginning after the date 
of the enactment of this Act.
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