General rule
Ordinary income
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).
Applicable percentage
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. |
Special rules
Under regulations prescribed by the Secretary, rules similar to the rules of section 1245 shall be applied for purposes of this section.
Pub. L. 91–172, title II, § 214(a)83 Stat. 572Pub. L. 94–455, title XIX90 Stat. 1793Pub. L. 98–369, div. A, title IV, § 492(b)(5)98 Stat. 854Pub. L. 99–514, title IV, § 402(b)(2)100 Stat. 2221Pub. L. 113–295, div. A, title II, § 221(a)(85)128 Stat. 4049Pub. L. 115–141, div. U, title IV, § 401(b)(32)132 Stat. 1204(Added , , ; amended , §§ 1901(b)(3)(K), 1906(b)(13)(A), , , 1834; , , ; , , ; , , ; , , .)
Editorial Notes
Amendments
Pub. L. 115–141, § 401(b)(32)(A)2018—Subsec. (a)(1). , struck out “during a taxable year beginning” after “disposed of” in introductory provisions.
Pub. L. 115–141, § 401(b)(32)(B)Subsec. (a)(1)(A). , substituted “section” for “sections” and “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”.
Pub. L. 115–141, § 401(b)(32)(C)Subsec. (a)(2). , substituted “section” for “sections” and struck out “or 182 (relating to expenditures by farmers for clearing land)” before period at end.
Pub. L. 113–295, § 221(a)(85)(A)2014—Subsec. (a)(1). , struck out “after ” after “beginning” in introductory provisions.
Pub. L. 113–295, § 221(a)(85)(B)Subsec. (a)(1)(A). , struck out “after ,” after “taxpayer”.
Pub. L. 99–5141986—Subsec. (a)(1)(A). 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)”.
Pub. L. 98–3691984—Subsec. (a)(1). 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.
Pub. L. 94–455, § 1901(b)(3)(K)1976—Subsec. (a)(1). , substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.
Pub. L. 94–455, § 1906(b)(13)(A)Subsec. (b). , struck out “or his delegate” after “Secretary”.
Statutory Notes and Related Subsidiaries
Effective Date of 2014 Amendment
Pub. L. 113–295section 221(b) of Pub. L. 113–295section 1 of this titleAmendment by effective , subject to a savings provision, see , set out as a note under .
Effective Date of 1986 Amendment
Pub. L. 99–514section 402(c) of Pub. L. 99–514section 182 of this titleAmendment by applicable to amounts paid or incurred after , in taxable years ending after such date, see , set out as an Effective Date of Repeal note under former .
Effective Date of 1984 Amendment
Pub. L. 98–369section 492(d) of Pub. L. 98–369section 170 of this titleAmendment by applicable to taxable years beginning after , see , set out as a note under .
Effective Date of 1976 Amendment
section 1901(b)(3)(K) of Pub. L. 94–455section 1901(d) of Pub. L. 94–455section 2 of this titleAmendment by effective for taxable years beginning after , see , set out as a note under .
Effective Date
Pub. L. 91–172, title II, § 214(c)83 Stat. 573
Savings Provision
Pub. L. 115–141section 401(e) of Pub. L. 115–141section 23 of this titleFor provisions that nothing in amendment by be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to , for purposes of determining liability for tax for periods ending after , see , set out as a note under .