41-160: IA 100F Capital Gain Deduction - ESOP 41-160 (2025)
Iowa · Iowa DOR · Used for tax years 2025
The 2025 IA 100F calculates the Iowa capital gain deduction for qualifying installment sales of Iowa corporation stock to a qualified Iowa employee stock ownership plan (ESOP) occurring before January 1, 2023. It reports sale details, ownership information, and current-year capit
Who files this form
Use the 2025 IA 100F to support an Iowa capital gain deduction for a qualifying installment sale of employer securities to a qualified Iowa Employee Stock Ownership Plan (ESOP). The sale must have occurred before January 1, 2023.
To qualify under this form:
- The securities sold must have been Iowa corporation stock. An Iowa corporation has its commercial domicile in Iowa. An LLC does not count as an Iowa corporation for this deduction.
- Upon completion of the sale, the qualified Iowa ESOP must have owned at least 30% of all outstanding employer securities issued by the corporation.
Complete a separate IA 100F for each qualifying sale and complete all parts each year of the installment sale. If spouses file separately, each spouse must complete a form for the deduction claimed based on that spouse’s ownership percentage.
What you'll need
Have the following information ready to complete the form:
- Your name and Social Security number.
- The first installment date and expected final installment date.
- Total capital gain over the life of the installment sale, total capital gain deductions claimed in prior years, and capital gain received during tax year 2025, excluding interest.
- The Iowa corporation’s name and the qualifying Iowa ESOP’s name.
- Whether the ESOP owned at least 30% of all outstanding employer securities upon completion of the sale.
- Your ownership percentage at the time of sale and the names of all persons and entities that owned the securities.
If the gain flowed through a partnership, S corporation, LLC, estate, or trust, report all owners of that entity. The Department may request additional information to verify eligibility.
How to file
Complete all parts of IA 100F and include it with your IA 1040 Iowa Individual Income Tax Return (41-001). Use a separate IA 100F for each qualifying sale.
On Part III, line 6, enter 50% of the capital gain reported on Part I, line 2e. Include that deduction on IA 1040 Schedule 1, line 16.
The supplied text does not provide a mailing address or e-filing instructions.
Common mistakes
- Using the form for an ineligible sale. Stop if the sale occurred on or after January 1, 2023, or was not an installment sale.
- Treating an LLC as an Iowa corporation. The form specifically says an LLC does not qualify as an Iowa corporation for this deduction.
- Including interest in capital gain. Do not include interest received in Part I, line 2.
- Reporting ownership incorrectly. Round ownership to the nearest one tenth of one percent. If you are not the sole owner, your percentage must be greater than 0% and less than 100%.
- Leaving out owners of a pass-through entity. If the gain flowed through an entity, all owners of that entity must be reported.
- Claiming amounts that are not eligible net capital gain. The instructions say the deduction applies to net capital gain. Nonrecaptured losses are treated as ordinary income and are not eligible for the deduction.
- Omitting the annual form. Complete all parts each year of a qualifying installment sale and include the form with your IA 1040.
Questions people ask
Can I use IA 100F for a sale that occurred in 2025?
No. The 2025 form is only for qualifying installment sales that occurred before January 1, 2023.
How much is the deduction?
Part III, line 6 is 50% of the taxpayer’s capital gain reported on Part I, line 2e. The deduction applies to net capital gain, and interest received must not be included.
How do married owners answer the sole-owner question?
If you file jointly and both spouses are the only owners, check “Yes” on Part III, line 2. If you file separately and both spouses are owners, check “No.” Each spouse must complete an IA 100F and enter that spouse’s separate ownership percentage on line 3.
Can I report multiple sales on one IA 100F?
No. Complete a separate IA 100F for each sale to a qualified Iowa ESOP. Complete all parts each year of a qualifying installment sale.
Can the Department ask for more information?
Yes. The Iowa Department of Revenue uses the form to verify eligibility and may request additional information.