41-156: IA 100B Capital Gain Deduction - Farm Property 41-156 (2024)
Iowa · Iowa DOR · Used for tax years 2024
The 2024 IA 100B documents an Iowa capital gain deduction for real property used in a farm business and sold through an installment sale before January 1, 2023. It reports installment sale gains, prior deductions, property ownership, and the taxpayer’s participation in farming ac
Who files this form
Use the 2024 IA 100B to support an Iowa capital gain deduction for a qualifying installment sale of real property used in a farm business that occurred before January 1, 2023.
- Include the completed form with your IA 1040.
- Complete a separate IA 100B for each farmland sale.
- Complete the entire form each year of a qualifying installment sale.
- If spouses file separately, each spouse must complete an IA 100B for the deduction claimed based on that spouse’s ownership percentage.
The farmland must have been held for at least 10 years under IRC section 1223. The form also asks about farming activities to verify eligibility.
For sales occurring on or after January 1, 2023, use IA 100G if you are a retired farmer or surviving spouse, or IA 100H otherwise.
What you'll need
Have these records and details ready:
- Installment sale information: First and expected final installment dates, total capital gain over the sale’s life, deductions claimed in prior years, and capital gain received in 2024.
- Property information: Farmland address or legal description, county and location details, total acres sold, and supporting documentation showing acquisition and sale dates.
- Farming history: Land managers, whether they were paid, federal forms or schedules used to report land income, and acres used for personal farming, cash rent, crop-share, CRP, or other purposes for the required reporting period.
- Activity records: Records supporting your farming duties and any material participation tests claimed. Records prepared long after the activity generally are not acceptable.
- Ownership and buyer details: Ownership percentage, owner names, how you acquired the property, buyer names, and buyers’ relationships to you.
- Applicable personal dates: When Old-Age Social Security benefits began, when a disability began, or when a spouse died, as requested by the form.
How to file
Complete all parts of IA 100B and include it with your IA 1040. Use a separate IA 100B for each farmland sale.
Enter the capital gain deduction from Part I, line 3e, on Part III, line 8, and include it on IA 1040 Schedule 1, line 16.
The supplied text does not give a mailing address or e-file directions.
Common mistakes
- Using IA 100B for a newer sale: This form is only for installment sales occurring before January 1, 2023.
- Including interest: Do not include interest received in the installment sale capital gain amounts.
- Leaving parts incomplete: Complete the entire form each year of a qualifying installment sale.
- Reporting acreage totals that do not match: For each year in Part II, line 14, the acreage categories must add up to the total acres sold on Part II, line 2.
- Assuming cash rent proves material participation: Cash-basis rental generally does not establish material participation. The landlord must show material participation in the farming activity.
- Using unsupported activity descriptions: Farming activities must be supported by records. Records prepared long after the activity generally are not acceptable.
- Including nonrecaptured losses in the deduction: These losses are treated as ordinary income and are not eligible for the Iowa capital gain deduction.
Questions people ask
Do I need to complete IA 100B again for each installment year?
Yes. Complete the entire form, including all parts, each year of a qualifying installment sale.
Can property qualify if I owned it for less than 10 years?
The property must have been held for at least 10 years under IRC section 1223. The instructions explain that a like-kind exchange or involuntary conversion may allow the holding period to include previously held property. If your ownership period is shorter, explain the difference in Part II, line 5.
How do married couples report ownership?
If filing jointly and the two spouses are the only owners, check “Yes” to the sole-owner question in Part III, line 3. If filing separately and both spouses own the property, check “No.” Each spouse completes a separate IA 100B and reports that spouse’s ownership percentage.
Will the Iowa Department of Revenue review my deduction?
The deduction is subject to review. The Department uses IA 100B to verify eligibility and may request additional information.