US Federal Senate Bill SB930

US Federal 2025-2026 Regular Session

• Introduced: 3/11/25
• Refer: 3/11/25

Caption

A bill to amend the Internal Revenue Code of 1986 to exclude from gross income capital gains from the sale of certain farmland property which are reinvested in individual retirement plans.

Summary

SB930 would create a new federal income tax exclusion for certain capital gains realized when a taxpayer sells or exchanges qualified farmland property to a qualified farmer and then reinvests the gain in an individual retirement plan within a 60-day window. The bill adds a new Internal Revenue Code section allowing the excluded gain to be tied to the amount contributed to the IRA, and it also increases the annual IRA contribution limit by the amount of qualifying farmland-sale gain, subject to the bill’s formulas and timing rules. The bill is narrowly targeted to farmland that has been used or leased for farming purposes for substantially all of the prior 10 years, and to buyers who are actively engaged in farming and are identified in a written agreement. It also includes recapture rules: if the buyer later sells the property or stops using it for farming within 10 years, an additional tax is imposed, with interest, and the buyer is personally liable. The bill applies prospectively to sales or exchanges in taxable years beginning after enactment.

Impact

SB930 would amend the Internal Revenue Code by adding new section 139J and conforming changes to section 408 governing individual retirement plans. It would create a new tax preference for farmland transfers, alter IRA contribution rules for qualifying transactions, and add enforcement, recapture, and limitation-period provisions tied to later nonfarm use or disposition. The practical effect would be to reduce taxable capital gains for eligible farmland sellers while encouraging continued agricultural use by qualified farmers.

Sentiment

Based on the available record, the bill appears to have a generally supportive or at least noncontroversial introduction stage, with no recorded votes or committee debate in the provided materials. It was introduced by Senator McConnell and referred to the Senate Finance Committee, suggesting it is being considered as a tax policy measure rather than as a contested floor issue. Because there are no transcripts or votes, there is no documented opposition or support beyond the bill’s introduction and referral.

Contention

The main policy tension inherent in the bill is between providing tax relief and retirement-planning flexibility for farmland owners versus limiting the benefit to a very specific class of transactions. Potential points of contention include the narrow definition of qualified farmland and qualified farmer, the requirement for a written agreement and irrevocable election, and the 10-year recapture tax if the land is later sold or taken out of farming use. Another possible issue is whether the increased IRA contribution treatment creates a special tax advantage for farm owners relative to other asset sellers.