Watch For A State Capital Gains Deduction for Sale of Farm Assets
We had a reader ask the following question:
“Does Iowa have a reduced capital gains tax rate on sale of farm land held for 15 years?”
If certain qualifications are met such as holding the farmland or assets for at least 10 years and material participation in the farm (can not cash rent the land), Iowa does have an exclusion of 100% of the capital when selling your farmland or other farm assets. This also applies to other business related assets, not just farmland.
I also know that Oregon had a capital gains exclusion for the sale of farmland, although that may no longer be there.
The key when analyzing your total capital gains tax is to review your state requirements to determine if there is a qualified deduction for the sale of farm assets. Many states have these exclusions, but there are almost always different rules for each state.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Yes, Iowa does have a capital gain exclusion for long-held farm land…
A reader asks farm-tax blogger Paul Neiffer, “Does Iowa have a reduced capital gains tax rate on sale of farm……