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House File 2649 - IntroducedA Bill ForAn Act 1excluding the net capital gain from the sale of certain
2livestock from the computation of net income for purposes
3of the individual income tax, and including retroactive
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.7, Code 2024, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 44. a. For purposes of this subsection,
4“held” shall be determined with reference to the holding period
5provisions of section 1223 of the Internal Revenue Code and the
6federal regulations pursuant thereto.
7b. Subtract the net capital gain from the following:
8(1) The sale of cattle or horses held by the taxpayer for
9breeding, draft, dairy, or sporting purposes for a period
10of twenty-four months or more from the date of acquisition,
11but only if the taxpayer received more than one-half of the
12taxpayer’s gross income from farming or ranching operations
13during the tax year.
14(2) The sale of breeding livestock, other than cattle or
15horses, held by the taxpayer for a period of twelve months or
16more from the date of acquisition, but only if the taxpayer
17received more than one-half of the taxpayer’s gross income from
18farming or ranching operations during the tax year.
19c. A retired farmer as defined in subsection 13 is not
20eligible for the exclusion in this subsection if taking the
21exclusion allowed in subsection 13, paragraph “c” or “d”, in the
22same tax year.
23 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
24retroactively to January 1, 2024, for tax years beginning on
25or after that date.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill excludes the net capital gain from the sale of
30certain livestock from the computation of net income for
31purposes of the individual income tax.
32The bill allows a taxpayer to exclude the net capital gain
33from the sale of cattle or horses if held by the taxpayer for
34breeding, draft, dairy, or sporting purposes for more than
3524 months, but only if the taxpayer received more than 50
-1-1percent of the taxpayer’s gross income from farming or ranching
2operations during the tax year.
3The bill allows a taxpayer to exclude the net capital gain
4from the sale of breeding livestock, other than cattle or
5horses, held by the taxpayer for a period of 12 months or more
6from the date of acquisition, but only if the taxpayer received
7more than one-half of the taxpayer’s gross income from farming
8or ranching operations during the tax year.
9A retired farmer as defined in Code section 422.7(13) is
10not eligible for the exclusion in the bill if taking a similar
11exclusion allowed in Code section 422.7(13).
12The bill applies retroactively to January 1, 2024, for tax
13years beginning on or after that date.
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2livestock from the computation of net income for purposes
3of the individual income tax, and including retroactive
4applicability provisions.
5BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 422.7, Code 2024, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 44. a. For purposes of this subsection,
4“held” shall be determined with reference to the holding period
5provisions of section 1223 of the Internal Revenue Code and the
6federal regulations pursuant thereto.
7b. Subtract the net capital gain from the following:
8(1) The sale of cattle or horses held by the taxpayer for
9breeding, draft, dairy, or sporting purposes for a period
10of twenty-four months or more from the date of acquisition,
11but only if the taxpayer received more than one-half of the
12taxpayer’s gross income from farming or ranching operations
13during the tax year.
14(2) The sale of breeding livestock, other than cattle or
15horses, held by the taxpayer for a period of twelve months or
16more from the date of acquisition, but only if the taxpayer
17received more than one-half of the taxpayer’s gross income from
18farming or ranching operations during the tax year.
19c. A retired farmer as defined in subsection 13 is not
20eligible for the exclusion in this subsection if taking the
21exclusion allowed in subsection 13, paragraph “c” or “d”, in the
22same tax year.
23 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies
24retroactively to January 1, 2024, for tax years beginning on
25or after that date.
26EXPLANATION
27The inclusion of this explanation does not constitute agreement with
28the explanation’s substance by the members of the general assembly.
29This bill excludes the net capital gain from the sale of
30certain livestock from the computation of net income for
31purposes of the individual income tax.
32The bill allows a taxpayer to exclude the net capital gain
33from the sale of cattle or horses if held by the taxpayer for
34breeding, draft, dairy, or sporting purposes for more than
3524 months, but only if the taxpayer received more than 50
-1-1percent of the taxpayer’s gross income from farming or ranching
2operations during the tax year.
3The bill allows a taxpayer to exclude the net capital gain
4from the sale of breeding livestock, other than cattle or
5horses, held by the taxpayer for a period of 12 months or more
6from the date of acquisition, but only if the taxpayer received
7more than one-half of the taxpayer’s gross income from farming
8or ranching operations during the tax year.
9A retired farmer as defined in Code section 422.7(13) is
10not eligible for the exclusion in the bill if taking a similar
11exclusion allowed in Code section 422.7(13).
12The bill applies retroactively to January 1, 2024, for tax
13years beginning on or after that date.
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