Sponsor
Mark Alford
Representative · R-MO
Representative · R-MO
The bill provides targeted tax incentives to make land acquisition and leasing easier for beginning farmers and to help preserve farmland, but does so at the cost of reduced federal revenue and added complexity that may disproportionately benefit wealthier sellers and increase administrative burdens.
Beginning farmers: can exclude 40% of gain on qualifying farmland sales made to them, lowering purchase costs or improving cash flow and making it easier for new farm entrants to acquire land.
Landowners leasing to beginning farmers: may exclude up to $25,000 of lease income per year, reducing tax burden on lessors and encouraging more leasing arrangements that improve access to land for new farmers.
Rural communities and working farms: limits and recapture rules target the benefit to bona fide beginning farmers and genuine farm use, helping keep land in agricultural production and preserving farmland.
All taxpayers: the exclusion reduces federal tax revenue, which could increase deficits or force spending cuts or tax offsets that affect other public services or taxpayers.
Middle-class families and taxpayers: large aggregate exclusion caps (up to $1.5M availability) risk concentrating tax benefits among wealthier landowners who sell farmland rather than primarily aiding struggling new farmers.
Taxpayers and the IRS: complex eligibility, lookback, aggregation, and recapture rules increase compliance costs and administrative burden, raising the risk of errors, disputes, and higher enforcement/administration costs.
Based on analysis of 2 sections of legislative text.
Creates a new tax exclusion for certain gains from sales and limited lease income when qualifying farmland is transferred or leased to a USDA‑certified beginning farmer, with caps and recapture rules.
Official title: To amend the Internal Revenue Code of 1986 to exclude from gross income certain gains and other income related to use of farmland by beginning farmers.
Introduced December 18, 2025 by Mark Alford · Last progress December 18, 2025
Creates a new tax exclusion to encourage transfers and use of farmland by beginning farmers. The bill excludes a portion of gain on sales of qualifying farmland to a beginning farmer and excludes limited lease/rental income from leasing qualifying farmland to beginning farmers, defines who counts as qualifying farmland and a beginning farmer, imposes a 5‑year recapture if the land stops being farmed, and requires annual Treasury reporting to Congress. The exclusions include 40% of long‑term gain on sales/exchanges of qualifying farmland to a beginning farmer (with an annual per‑taxpayer aggregate cap formula) and up to $25,000 per year of lease income excluded for short leases (≤10 years). The rules set multi‑year ownership/use lookbacks, certification by USDA, aggregation and recapture rules, and take effect for taxable years beginning after enactment.