Bill > HSB188

This Study Bill proposes an amendment to Iowa law to allow for a capital gain deduction on the sale of real property used in a farming business, meaning property primarily used for activities like crop production, livestock management, or horticulture for profit. The bill defines key terms such as "farming business," "held" (referring to ownership duration based on federal tax rules), "livestock," and "materially participated" (meaning actively involved in the farming operation as defined by federal tax law). Crucially, it clarifies that "real property used in a farming business" includes land and its structures primarily used for farming, even including residential buildings on the property, and is presumed for property tax purposes unless proven otherwise. The bill then outlines two conditions under which a taxpayer can subtract the net capital gain from the sale of such property: either by having materially participated in the farming business and held the property for at least ten years, or by selling the property to a relative.