Tax on a farmland sale to a farmer may be paid in four installments
What the document says“In the case of gain from the sale or exchange of qualified farmland property to a qualified farmer, at the election of the taxpayer, the portion of the net income tax of such taxpayer for the taxable year of the sale or exchange which is equal to the applicable net tax liability shall be paid in 4 equal installments.”
The section adds a new section 1062 to part IV of subchapter O of chapter 1 of the Internal Revenue Code of 1986, redesignating section 1062 as section 1063. Where a taxpayer elects, the part of net income tax for the year of a sale or exchange of qualified farmland property to a qualified farmer that equals the applicable net tax liability is paid in four equal installments. The applicable net tax liability is the excess of net income tax for the year over what it would be without the gain.
What the document actually says“In the case of gain from the sale or exchange of qualified farmland property to a qualified farmer, at the election of the taxpayer, the portion of the net income tax of such taxpayer for the taxable year of the sale or exchange which is equal to the applicable net tax liability shall be paid in 4 equal installments.”
The tax on the sale may be paid in four equal parts. The seller must choose this. The land must go to a working farmer.
Only the tax caused by the gain may be split. The rest is paid the normal way. The next rules set when each part is due.
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