I
104TH CONGRESS
1ST SESSION
H. R. 441
To amend the Internal Revenue Code of 1986 to provide a one-time exclusion
of gain from the sale of farmland to a beginning farmer.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 9, 1995
Mr. LIGHTFOOT introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
a one-time exclusion of gain from the sale of farmland
to a beginning farmer.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. ONE-TIME EXCLUSION OF GAIN FROM SALE OF
FARMLAND TO BEGINNING FARMER.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically excluded from gross income) is amended
by inserting after section 121 the following new section:
‘‘SEC. 121A. ONE-TIME EXCLUSION OF GAIN FROM SALE OF
FARMLAND TO BEGINNING FARMER.
‘‘(a) GENERAL RULE.—In the case of an individual,
at the election of the taxpayer, gross income does not in-
clude gain from the sale or exchange of property if—
‘‘(1) the taxpayer has attained the age of 55
before the date of such sale or exchange,
‘‘(2) during the 8-year period ending on the
date of the sale or exchange, such property—
‘‘(A) was owned by the taxpayer, and
‘‘(B) was used by any person as a farm for
farming 
purposes 
(as 
defined 
in 
section
2032A(e)), and
‘‘(3) such property is acquired from the tax-
payer by a beginning farmer.
The requirement of paragraph (2)(B) shall be treated as
met only if, for periods aggregating 3 years or more dur-
ing such 8-year period, such use was by the taxpayer.
‘‘(b) APPLICATION
TO
ONLY
1 SALE
OR
EX-
CHANGE.—Subsection (a) shall not apply to any sale or
exchange by the taxpayer if an election by the taxpayer
or his spouse under subsection (a) or section 121 with re-
spect to any other sale or exchange is in effect. The pre-
ceding sentence shall be applied by not taking into account
any election referred to in section 121(b)(3) and any elec-
tion under section 121 with respect to the principal resi-
dence of the taxpayer which is acquired by the beginning
farmer who acquired the property referred to in subsection
(a).
‘‘(c) ELECTION.—An election under subsection (a)
may be made or revoked at any time before the expiration
of the period for making a claim for credit or refund of
the tax imposed by this chapter for the taxable year in
which the sale or exchange occurred, and shall be made
or revoked in such manner as the Secretary shall by regu-
lations prescribe. In the case of a taxpayer who is married,
an election under subsection (a) or a revocation thereof
may be made only if his spouse joins in such election or
revocation.
‘‘(d) BEGINNING FARMER.—For purposes of this sec-
tion, the term ‘beginning farmer’ means any qualified be-
ginning farmer or rancher, as defined by section
343(a)(11) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1991).
‘‘(e) SPECIAL RULES.—Rules similar to the rules of
paragraphs (1), (2), and (6) of section 121(d) shall apply
for purposes of this section.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such part III is amended by inserting after the item
relating to section 121 the following new item:
‘‘Sec. 121A. One-time exclusion of gain from sale of farmland to
beginning farmer.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges after the
date of the enactment of this Act in taxable years ending
after such date.
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