41-161: 2024 IA 100 Capital Gain Deduction Information 41-161 (2024)
Iowa · Iowa DOR · Used for tax years 2024
This Iowa capital gain deduction information sheet explains which IA 100 form to use for different types of sales. It outlines the repeal of the deduction for most transactions occurring on or after January 1, 2023, the listed exceptions, and requirements for supporting a deducti
Who files this form
If you claim an Iowa capital gain deduction, you must complete the applicable IA 100 form and include it with your IA 1040. This applies even if the gain was passed through to you.
For tax year 2024, this information sheet says the deduction was repealed for most transactions occurring on or after January 1, 2023. It lists these exceptions:
- Certain sales of real property used in a farming business.
- Certain livestock sales by a retired farmer who sold all or substantially all of their interest in the farming business.
- Certain livestock sales by a taxpayer who received more than half of their gross income from farming or ranching and did not make the single lifetime election described for retired farmers.
- Deductions for previously eligible installment sales that occurred before January 1, 2023.
The livestock categories are cattle or horses held for breeding, draft, dairy, or sporting purposes, or other breeding livestock.
What you'll need
- Your IA 1040.
- The completed IA 100 form that applies to your capital gain deduction.
The Iowa Department of Revenue uses the applicable IA 100 to verify eligibility and may request additional information.
How to file
Include the completed applicable IA 100 form with your IA 1040 to support the deduction. The information sheet does not provide a mailing address or e-file directions.
For tax year 2024, choose the form based on the sale:
- IA 100A: Qualifying sales of cattle, horses, or breeding livestock.
- IA 100B through IA 100F: Only installment sales from sales occurring before January 1, 2023. These cover farming real property, non-farming business real property, timber, a business, and employer securities sold to a qualified Iowa employee stock ownership plan, respectively.
- IA 100G: Sales by a retired farmer occurring on or after January 1, 2023.
- IA 100H: Sales of real property used in a farming business occurring on or after January 1, 2023.
- IA 100J: Sales of capital stock occurring on or after January 1, 2023.
See the instructions for the respective form for more information about the deduction.
Common mistakes
- Combining distinct sales: Complete a separate form for each distinct sale, except for IA 100G and multiple livestock sales reported on IA 100A.
- Skipping later installment years: Complete the applicable form each year of a qualifying installment sale.
- Leaving out passed-through gains: The applicable form is required even if the gain was passed through to you.
- Overlooking spouse-specific forms: Married taxpayers filing separately must complete separate deduction forms based on each spouse’s ownership percentage. All married taxpayers must complete a separate IA 100G regardless of filing status.
- Assuming a corporate sale qualifies: An asset sale by a C corporation generally does not qualify.
Questions people ask
Is the deduction available for every capital gain?
No. The deduction is repealed for most transactions occurring on or after January 1, 2023, with the exceptions listed in this 2024 information sheet.
Do I need an IA 100 for a passed-through gain?
Yes. You must complete the applicable form even if the gain was passed through to you.
Will the Department review my deduction?
The deduction is subject to review. The Department uses the applicable IA 100 to verify eligibility and may request additional information.
Where can I find help checking whether a gain qualifies?
The sheet points to the online Iowa Capital Gain Deduction Flowchart, the instructions for the respective form, and Iowa Administrative Code rules 701; 302.41 and 701; 302.87.