Bill Text: IA HF778 | 2019-2020 | 88th General Assembly | Enrolled
Bill Title: A bill for an act relating to taking a capital gain deduction for the sale of real property used in a farming business. (Formerly HSB 188.) Effective 7-1-19.
Spectrum: Committee Bill
Status: (Passed) 2019-05-21 - Signed by Governor. H.J. 1084. [HF778 Detail]
Download: Iowa-2019-HF778-Enrolled.html
House
File
778
-
Enrolled
House
File
778
AN
ACT
RELATING
TO
TAKING
A
CAPITAL
GAIN
DEDUCTION
FOR
THE
SALE
OF
REAL
PROPERTY
USED
IN
A
FARMING
BUSINESS.
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
Section
1.
2018
Iowa
Acts,
chapter
1161,
section
113,
is
amended
by
striking
the
section
and
inserting
in
lieu
thereof
the
following:
SEC.
113.
Section
422.7,
subsection
21,
Code
2018,
is
amended
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
following:
21.
a.
For
purposes
of
this
subsection
:
(1)
“Farming
business”
means
the
production,
care,
growing,
harvesting,
preservation,
handling,
or
storage
of
crops
or
forest
or
fruit
trees;
the
production,
care,
feeding,
management,
and
housing
of
livestock;
or
horticulture,
all
for
intended
profit.
(2)
“Held”
shall
be
determined
with
reference
to
the
holding
period
provisions
of
section
1223
of
the
Internal
Revenue
Code
and
the
federal
regulations
pursuant
thereto.
(3)
“Livestock”
means
the
same
as
defined
in
section
717.1.
(4)
“Materially
participated”
means
the
same
as
“material
participation”
in
section
469(h)
of
the
Internal
Revenue
Code.
(5)
(a)
“Real
property
used
in
a
farming
business”
means
all
tracts
of
land
and
the
improvements
and
structures
located
on
them
which
are
in
good
faith
used
primarily
for
a
farming
business.
Buildings
which
are
primarily
used
or
intended
for
House
File
778,
p.
2
human
habitation
are
deemed
to
be
used
in
a
farming
business
when
the
building
is
located
on
or
adjacent
to
the
parcel
used
in
the
farming
business.
Land
and
the
nonresidential
improvements
and
structures
located
on
it
shall
be
considered
to
be
used
primarily
in
a
farming
business
include
but
are
not
limited
to
land,
improvements
or
structures
used
for
the
storage
or
maintenance
of
farm
machinery
or
equipment,
for
the
drying,
storage,
handling,
or
preservation
of
agricultural
crops,
or
for
the
storage
of
farm
inputs,
feed,
or
manure.
Real
property
used
in
a
farming
business
shall
also
include
woodland,
wasteland,
pastureland,
and
idled
land
used
for
the
conservation
of
natural
resources
including
soil
and
water.
(b)
Real
property
classified
as
agricultural
property
for
Iowa
property
tax
purposes,
except
real
property
described
in
section
441.21,
subsection
12,
paragraph
“a”
or
“b”
,
shall
be
presumed
to
be
real
property
used
in
a
farming
business.
This
presumption
is
rebuttable
by
the
department
by
a
preponderance
of
evidence
that
the
real
property
did
not
meet
the
requirements
of
subparagraph
division
(a).
(6)
“Relative”
means
a
person
that
satisfies
one
or
more
of
the
following
conditions:
(a)
The
individual
is
related
to
the
taxpayer
by
consanguinity
or
affinity
within
the
second
degree
as
determined
by
common
law.
(b)
The
individual
is
a
lineal
descendent
of
the
taxpayer.
For
purposes
of
this
subparagraph
division,
“lineal
descendent”
means
children
of
the
taxpayer,
including
legally
adopted
children
and
biological
children,
stepchildren,
grandchildren,
great-grandchildren,
and
any
other
lineal
descendent
of
the
taxpayer.
(c)
An
entity
in
which
an
individual
who
satisfies
the
conditions
of
either
subparagraph
division
(a)
or
(b)
has
a
legal
or
equitable
interest
as
an
owner,
member,
partner,
or
beneficiary.
b.
Subtract
the
net
capital
gain
from
the
sale
of
real
property
used
in
a
farming
business
if
one
of
the
following
conditions
are
satisfied:
(1)
The
taxpayer
has
materially
participated
in
a
farming
business
for
a
minimum
of
ten
years
and
has
held
the
real
House
File
778,
p.
3
property
used
in
a
farming
business
for
a
minimum
of
ten
years.
(2)
The
taxpayer
has
held
the
real
property
used
in
a
farming
business
which
is
sold
to
a
relative
of
the
taxpayer.
______________________________
LINDA
UPMEYER
Speaker
of
the
House
______________________________
CHARLES
SCHNEIDER
President
of
the
Senate
I
hereby
certify
that
this
bill
originated
in
the
House
and
is
known
as
House
File
778,
Eighty-eighth
General
Assembly.
______________________________
CARMINE
BOAL
Chief
Clerk
of
the
House
Approved
_______________,
2019
______________________________
KIM
REYNOLDS
Governor
