Except as otherwise provided in this section, if farm land which the taxpayer has held for less than 10 years is disposed of during a taxable year beginning after December 31, 1969, the lower of—
(A)the applicable percentage of the aggregate of the deductions allowed under sections
175 (relating to soil and water conservation expenditures) and 182 (relating to expenditures by farmers for clearing land) for expenditures made by the taxpayer after December 31, 1969, with respect to the farm land or
(B)the excess of—
(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
(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.
(2) Farm land
For purposes of this section, the term “farm land” means any land with respect to which deductions have been allowed under sections
175 (relating to soil and water conservation expenditures) or 182 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986).
(3) Applicable percentage
For purposes of this section—
If the farm land is disposed of—
The applicablepercentage is—
Within 5 years after the date it was acquired
Within the sixth year after it was acquired
Within the seventh year after it was acquired
Within the eighth year after it was acquired
Within the ninth year after it was acquired
10 years or more years after it was acquired
(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.
The date of the enactment of the Tax Reform Act of 1986, referred to in subsec. (a)(1)(A), is the date of enactment of Pub. L. 99–514, which was approved Oct. 22, 1986. Section 402(a) of the Tax Reform Act of 1986 repealed section
182 of this title.
1986—Subsec. (a)(1)(A). Pub. L. 99–514substituted “(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. 98–369struck 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
Subsec. (b). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Effective Date of 1986 Amendment
Amendment by Pub. L. 99–514applicable to amounts paid or incurred after Dec. 31, 1985, in taxable years ending after such date, see section 402(c) ofPub. 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. 98–369applicable to taxable years beginning after Dec. 31, 1983, see section 492(d) ofPub. 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) ofPub. L. 94–455effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) ofPub. L. 94–455, set out as a note under section
2 of this title.
Section 214(c) ofPub. L. 91–172provided that: “The amendments made by this section [enacting this section] shall apply to taxable years beginning after December 31, 1969.”
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
Description of Change
Statutes at Large
LII has no control over and does not endorse any external Internet site that contains links to or references LII.