41-161: 2025 IA 100 Capital Gain Deduction Information 41-161 (2025)
Iowa · Iowa DOR · Used for tax years 2025
This information sheet explains Iowa capital gain deduction restrictions and identifies which IA 100 form to use for different types of sales. It also explains how to submit the applicable form to support a deduction claimed on the IA 1040.
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 requirement also applies if the gain was passed through to you.
The information sheet says the deduction was repealed for most transactions occurring on or after January 1, 2023.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.
- Sales of qualifying cattle, horses, or other breeding livestock by a retired farmer who has sold all or substantially all of their interest in the farming business.
- Sales of qualifying cattle, horses, or other breeding livestock 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.
For the livestock exceptions, cattle or horses must have been held for breeding, draft, dairy, or sporting purposes. See the instructions for the applicable IA 100 form for more information.
What you'll need
- Your IA 1040.
- The completed IA 100 form that supports each Iowa capital gain deduction claimed.
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. Choose the form based on the sale:
For all qualifying livestock sales:
- IA 100A: Sale of Cattle, Horses, or Breeding Livestock.
Only for installment sales from sales occurring before January 1, 2023:
- IA 100B: Sale of Real Property Used in a Farming Business.
- IA 100C: Sale of Real Property Used in a Non-Farming Business.
- IA 100D: Sale of Timber.
- IA 100E: Sale of Business.
- IA 100F: Sale of Employer Securities to a Qualified Iowa Employee Stock Ownership Plan.
Only for sales occurring on or after January 1, 2023:
- IA 100G: Sales by a Retired Farmer.
- IA 100H: Sale of Real Property Used in a Farming Business.
- IA 100J: Sale of Capital Stock.
The information sheet does not provide a mailing address or e-filing directions.
Common mistakes
- Leaving out the supporting form. Include the completed, applicable IA 100 with your IA 1040.
- Combining distinct sales incorrectly. Complete a separate form for each distinct sale, except for IA 100G and multiple livestock sales reported on IA 100A.
- Skipping later years of an installment sale. Complete the applicable form each year of a qualifying installment sale.
- Skipping the form for a passed-through gain. The form is required even if the gain was passed through to you.
- Overlooking separate forms for spouses. Married taxpayers filing separately must complete separate forms based on each spouse’s ownership percentage. All married taxpayers must complete separate IA 100G forms regardless of filing status.
Questions people ask
Does an asset sale by a C corporation qualify?
Generally, the sale of an asset by a C corporation does not qualify for the Iowa capital gain deduction.
Do I need an IA 100 every year for a qualifying installment sale?
Yes. The applicable form must be completed each year of a qualifying installment sale.
Can the Department ask for more information?
Yes. The deduction is subject to review, and the Iowa Department of Revenue may request additional information.
Where can I find more information about eligibility?
The information sheet directs you to the instructions for the applicable form and Iowa Administrative Code rules 701; 302.41 and 701; 302.87.