IRC Section 1062: Attachment Requirements for Form 1065 and Form 1120-S (Schedule K-1) and Sample Covenant
More information is required when making a Section 1062 election for partners and S-corporation shareholders
With the enactment of Section 1062 under the One Big Beautiful Bill Act, taxpayers who sell or exchange “qualified farmland property” to a “qualified farmer” may elect to pay the net income tax attributable to the gain in four equal installments. This provision is designed to encourage the continued use of farmland for agricultural purposes by easing the tax burden on such sales. We previously posted on the details of this election last week.
However, to make this election, specific documentation and attachments are required when filing partnership (Form 1065) and S corporation (Form 1120-S) returns, as well as when providing Schedules K-1 to partners and shareholders.
This post outlines the required attachments, what must be provided to partners/shareholders, and provides a sample of the required covenant.
Section 1062: What Is Required?
