New Section 1062 — Spreading Out the Tax Bill on Farmland Sales
We have posted on this before but continue to get questions. We are providing more details on the new provision.
We have received a lot of questions lately about the new Section 1062 that was added to the Internal Revenue Code when the One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025. This is a provision that many of our readers who are thinking about selling farmland will want to understand before they pull the trigger on a deal.
Here is the bottom line: if you sell qualifying farmland to a qualified farmer, you can elect to pay the resulting income tax in four equal annual installments rather than writing one big check in the year of sale. And there is no interest charged on the deferred payments. That is a meaningful cash flow benefit for any farmer sitting on land with a low basis.
Who Qualifies?
