Internal Revenue Code – Section 1252

    Sec. 1252. Gain from disposition of farm land

 -STATUTE-

    (a) General rule

      (1) Ordinary income

        Except as otherwise provided in this section, if farm land

      which the taxpayer has held for less than 10 years is disposed of

      during a taxable year beginning after December 31, 1969, the

      lower of -

          (A) the applicable percentage of the aggregate of the

        deductions allowed under sections 175 (relating to soil and

        water conservation expenditures) and 182 (relating to

        expenditures by farmers for clearing land) for expenditures

        made by the taxpayer after December 31, 1969, with respect to

        the farm land or

          (B) the excess of -

            (i) the amount realized (in the case of a sale, exchange,

          or involuntary conversion), or the fair market value of the

          farm land (in the case of any other disposition), over

            (ii) the adjusted basis of such land,

 

      shall be treated as ordinary income. Such gain shall be

      recognized notwithstanding any other provision of this subtitle.

      (2) Farm land

        For purposes of this section, the term "farm land" means any

      land with respect to which deductions have been allowed under

      sections 175 (relating to soil and water conservation

      expenditures) or 182 (as in effect on the day before the date of

      the enactment of the Tax Reform Act of 1986).

      (3) Applicable percentage

        For purposes of this section -

 

 

          If the farm land is disposed of -             2The applicable

                                                        percentage is -

    --------------------------------------------------------------------

      Within 5 years after the date it was acquire          100 percent.

      Within the sixth year after it was acquired            80 percent.

      Within the seventh year after it was acquire           60 percent.

      Within the eighth year after it was acquired           40 percent.

      Within the ninth year after it was acquired            20 percent.

      10 years or more years after it was acquired            0 percent.

    --------------------------------------------------------------------

 

    (b) Special rules

      Under regulations prescribed by the Secretary, rules similar to

    the rules of section 1245 shall be applied for purposes of this

    section.

 

-SOURCE-

    (Added Pub. L. 91-172, title II, Sec. 214(a), Dec. 30, 1969, 83

    Stat. 572; amended Pub. L. 94-455, title XIX, Secs. 1901(b)(3)(K),

    1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834; Pub. L. 98-369,

    div. A, title IV, Sec. 492(b)(5), July 18, 1984, 98 Stat. 854; Pub.

    L. 99-514, title IV, Sec. 402(b)(2), Oct. 22, 1986, 100 Stat.

    2221.)

 

-REFTEXT-

                            REFERENCES IN TEXT                       

      The date of the enactment of the Tax Reform Act of 1986, referred

    to in subsec. (a)(1)(A), is the date of enactment of Pub. L. 99-

    514, which was approved Oct. 22, 1986. Section 402(a) of the Tax

    Reform Act of 1986 repealed section 182 of this title.

 

 

-MISC1-

                                AMENDMENTS                           

      1986 - Subsec. (a)(1)(A). Pub. L. 99-514 substituted "(as in

    effect on the day before the date of the enactment of the Tax

    Reform Act of 1986)" for "(relating to expenditures by farmers for

    clearing land)".

      1984 - Subsec. (a)(1). Pub. L. 98-369 struck out ", except that

    this section shall not apply to the extent section 1251 applies to

    such gain" after "of this subtitle" in last sentence.

      1976 - Subsec. (a)(1). Pub. L. 94-455, Sec. 1901(b)(3)(K),

    substituted "ordinary income" for "gain from the sale or exchange

    of property which is neither a capital asset nor property described

    in section 1231".

      Subsec. (b). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or

    his delegate" after "Secretary".

 

                     EFFECTIVE DATE OF 1986 AMENDMENT                

      Amendment by Pub. L. 99-514 applicable to amounts paid or

    incurred after Dec. 31, 1985, in taxable years ending after such

    date, see section 402(c) of Pub. L. 99-514, set out as an Effective

    Date of Repeal note under former section 182 of this title.

 

                     EFFECTIVE DATE OF 1984 AMENDMENT                

      Amendment by Pub. L. 98-369 applicable to taxable years beginning

    after Dec. 31, 1983, see section 492(d) of Pub. L. 98-369, set out

    as a note under section 170 of this title.

 

                     EFFECTIVE DATE OF 1976 AMENDMENT                

      Amendment by section 1901(b)(3)(K) of Pub. L. 94-455 effective

    for taxable years beginning after Dec. 31, 1976, see section

    1901(d) of Pub. L. 94-455, set out as a note under section 2 of

    this title.

 

                              EFFECTIVE DATE                         

      Section 214(c) of Pub. L. 91-172 provided that: "The amendments

    made by this section [enacting this section] shall apply to taxable

    years beginning after December 31, 1969."

 

-End-