41-156: IA 100B Capital Gain Deduction - Farm Property 41-156 (2025)
Iowa · Iowa DOR · Used for tax years 2025
The 2025 IA 100B documents an Iowa capital gain deduction for real property used in a farm business. It reports installment sale gains, property ownership, land use, and participation in farming activities, and is used only for installment sales occurring before January 1, 2023.
Who files this form
Use the 2025 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 Iowa Individual Income Tax Return.
- Complete a separate IA 100B for each farmland sale, and complete all parts 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.
For sales occurring on or after January 1, 2023, use IA 100G if you are a retired farmer or surviving spouse, or IA 100H if you are not.
What you'll need
Have these records and details available to complete the form:
- 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 2025.
- Property information: Address or legal description, county and location description, acres sold, and documentation showing acquisition and sale dates.
- Ownership and buyer details: Your ownership percentage, other owners’ names, how you acquired the property, buyers’ names, and their relationship to you.
- Farm-use history: Land managers, whether they were paid, federal forms or schedules reporting the land’s income, and acreage by use for the period required in Part II, line 14.
- Participation records: Records supporting your farming duties and any material participation tests you claim.
- Relevant personal dates: When Old-Age Social Security benefits or disability began, and a spouse’s date of death or benefit start date, if applicable.
How to file
Complete all parts of IA 100B, following the form’s directions to continue or stop based on your answers.
- In Part I, report the installment sale details and capital gain received during 2025. Do not include interest.
- In Part II, report the farmland, holding period, farm-use history, and farming activities.
- In Part III, report ownership, acquisition, and buyer details.
- Enter the deduction from Part I, line 3e on Part III, line 8, and include it on IA 1040 Schedule 1, line 16.
- Include the completed IA 100B with your IA 1040.
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 in capital gain. The instructions specifically say not to include interest received.
- Leaving parts incomplete in later years. Complete the entire form each year of a qualifying installment sale.
- Reporting acreage that does not add up. The acreage categories in Part II, line 14 must total the acres sold on Part II, line 2.
- Assuming cash rent proves material participation. A farmer renting land for cash generally is not considered to materially participate. The landlord must show material participation.
- Relying on records created long after the work. Farming activities must be supported by records. Records prepared long afterward generally are not acceptable.
- Including ineligible amounts in the deduction. The deduction applies to net capital gain. Nonrecaptured losses treated as ordinary income are not eligible.
Questions people ask
How long must I have held the farmland?
The farmland must have been held for at least 10 years, as defined under IRC section 1223. If your ownership period is shorter, explain on Part II, line 5 how you meet the holding-period requirement.
Do I need a separate form for each sale?
Yes. Complete a separate IA 100B for each farmland sale, including all parts each year of a qualifying installment sale.
How do married joint filers answer the sole-owner question?
If you file jointly and you and your spouse are the only owners, check “Yes” on Part III, line 3. The form directs sole owners to enter 100% on line 4.
Can Iowa ask for more information?
Yes. The Iowa Department of Revenue reviews the deduction and may request additional information to verify that you qualify.