A new tax law, part of the One Big Beautiful Bill Act, could make selling farmland a little easier on your wallet. Section 1062 is designed to help farmers by allowing them to spread the federal income tax from a qualifying land sale over four years instead of paying it all in the year of the sale.
How It Works
If you sell farmland to a qualified farmer, someone actively engaged in farming, and that buyer agrees to keep the land in agricultural use for at least 10 years, you may qualify for this tax option. The agreement must be documented with a legal covenant to ensure the land stays in farming.
Instead of facing one large tax bill, you can pay in four smaller, more manageable amounts. This can help with cash flow and may reduce your overall tax rate, depending on your income in each year. Tax professionals estimate the savings could be around 16 percent for many sellers.
Why It Matters
This isn’t just about saving money. By keeping the land in agricultural use, Section 1062 helps protect farmland for future generations. It also supports younger and expanding farmers who are ready to buy but want to ensure the land stays productive.
What to Do Next
If you are thinking about selling farmland, talk to a qualified tax advisor before making any decisions. The sale must meet specific requirements, and proper paperwork is essential to qualify for the benefit.
At AgQuest Financial, our mission is to support stability and growth for generations. Changes like Section 1062 show how planning ahead can make a real difference for you, your family, and the future of farming.