Bill · H.R. 6836· House(119-HR-6836)
Beginning Farmer Tax Incentive Act
- Introduced
- 12/18/2025
- Last activity
- 12/18/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Mark Alford
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
This bill, known as the "Beginning Farmer Tax Incentive Act," proposes amendments to the Internal Revenue Code of 1986. It seeks to exclude certain income from gross income when farmland is transferred to or leased by a beginning farmer. Specifically, it provides a tax exclusion for 40 percent of capital gains from the sale of qualifying farmland. It also allows for the exclusion of income from leases or rentals of qualifying farmland for terms not exceeding 10 years. To qualify, the land must have been used for farming with material participation for a specific period. The bill also establishes rules for what constitutes a "beginning farmer" and includes a recapture provision.
Yes· 3 of 9
Would farmers be better off under this?+8
The bill directly incentivizes the transfer of land to beginning farmers and provides tax exclusions for lease income.
Does this cut the tax on profits from selling investments?+7
The bill allows for a 40 percent exclusion of capital gains from the sale of qualifying farmland when transferred to a beginning farmer.
Would people over 65 be better off under this?+5
The bill provides tax relief for those selling or leasing farmland, which can benefit older landowners looking to transition their assets.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Tax relief on land sales: Under Section 2(a)(1), 40 percent of the gain from the sale or exchange of qualifying farmland can be excluded from gross income if the land is transferred to a beginning farmer. This provides a financial benefit to the seller.
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Limits on capital gains exclusion: Section 2(a)(2) limits the total excluded gain to $1,500,000 over a four-year period, which sets a cap on the tax benefit for the taxpayer.
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Benefits for land leasers: Section 2(b)(1) allows for the exclusion of income from the lease or rental of qualifying farmland to a beginning farmer, provided the lease term is 10 years or less. This can benefit those renting out their land.
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Annual income cap on leases: Section 2(b)(2) limits the excluded lease or rental income to $25,000 per taxpayer per taxable year.
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Support for beginning farmers: Section 2(d) defines a "beginning farmer" through various criteria, such as having a specific amount of reported farming income, being approved for specific loans, or having substantial farming knowledge.
Potential Negative Impacts for People
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Risk of tax recapture: Under Section 2(f)(1), if qualifying farmland ceases to be used for farming purposes within five years of a sale or exchange, the taxpayer may have to pay back the tax benefit.
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Tiered recapture penalties: Section 2(f)(2) outlines an "applicable percentage" that determines how much of the tax benefit is recaptured, starting at 100 percent in the first year and decreasing through the fifth year.
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Strict qualifications for farmland: Section 2(c)(1)(B) requires that the property must have been used for farming with material participation for at least 5 years out of an 8-year period, which may limit who can utilize these incentives.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Farmers+8Good For Business Owners+5Good For Seniors+5Good For High Income Households+4Good For Rural Residents+4
- Economy And Finance
- Reduces Capital Gains Tax+7Increases Job Creation+3Improves Economic Growth+2
- Environment Energy And Infrastructure
- Improves Rural Development+4
- 12/18/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House