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2020 IA 100B
Iowa Capital Gain Deduction – Real Property Used in a Farm Business
tax.iowa.gov

Name(s) ___________________________________________ SSN ___________________________

Part I: Sale of Real Property Used in a Farm Business

1. Farmland address or legal description (include county and a general description of the location)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
2. Total number of acres sold _______________________________________________________
3. Ownership period
a. Date acquired ........................................... 3a. ______________
b. Date sold ................................................... 3b. ______________
4. Length of holding period ................................... Years 4a. _______ Months 4b. ___________
5. If the taxpayer did not own the property for at least 10 years, explain how the taxpayer held the
property for at least 10 years under IRC section 1223.
___________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
6. Is the taxpayer receiving Old-Age Social Security benefits?
No ☐ ... Continue to Part I, line 8.
Yes ☐... Continue to Part I, line 7.

7. Provide the date taxpayer started receiving Old-Age Social Security benefits .. 7. ____________

8. Is the taxpayer a disabled farmer?
No ☐ ... Continue to Part I, line 10.
Yes ☐... Continue to Part I, line 9.

9. Provide the date the taxpayer’s disability began ............................................... 9. ____________
10. Is the taxpayer the surviving spouse of a farmer?
No ☐ ... Continue to Part I, line 14.
Yes ☐... Continue to Part I, line 11

11. Provide the date of the spouse’s death ............................................................. 11. ___________
12. Was the spouse receiving Old-Age Social Security benefits at the time of death?
No ☐ ... Continue to Part I, line 14.
Yes ☐... Continue to Part I, line 13.

13. Provide the date the spouse started receiving Old-Age Social Security
benefits ............................................................................................................. 13. ___________

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2020 IA 100B, page 2

14. Report the following for the 10 years prior to the sale, or if the taxpayer was receiving Old-Age
Social Security benefits, report the following for the 8 years prior to the first year the benefits
were received. See instructions if taxpayer answered yes to Part I, lines 6, 8, or 10.

Federal form or Acres the
Paid? schedule where taxpayer Cash Crop-
Calendar Name of land Yes taxpayer personally rent share CRP Other
Year manager or No reported income farmed acres acres acres acres

15. Cash Rent/Lease Arrangement
15a. Was the property rented on a cash rent/lease basis?
No ☐ .. Continue to Part I, line 16.
Yes ☐.. Continue to Part I, line 15b

15b. Did you materially participate in the farming activity?
No ☐ .. This gain is not eligible for Iowa capital gain deduction.
Yes ☐.. Continue to Part I, line 19 to explain material participation in the farming activity.

16. Crop-Share Arrangement
16a. Was the property involved in a crop-share arrangement?
No ☐ ... Continue to Part I, line 17.
Yes ☐... Continue to Part I, line 16b.

16b. Are you subject to self-employment tax on your crop-share income?
No ☐ ... This gain may not be eligible for Iowa capital gain deduction. See instructions.
Yes ☐... Continue to Part I, line 19.

17. Check the box for each applicable material participation test for which the taxpayer has
documentation. Check all that apply. If none of these apply, stop, the sale is not eligible for the
Iowa capital gain deduction.

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2020 IA 100B, page 3
17a. Test 1: The landlord does any three of the following:
• Pays or is obligated to pay for at least half the direct
costs of producing the crop....................................................................................... ☐
• Furnishes at least half the tools, equipment, and livestock
used in producing the crop. ....................................................................................... ☐
• Consults with the tenant. ........................................................................................... ☐
• Inspects the production activities periodically. ........................................................... ☐

17b. Test 2: The landlord regularly and frequently makes,
or takes part in making, management decisions substantially
contributing to or affecting the success of the enterprise. ................................................ ☐

17c. Test 3: The landlord worked 100 hours or more spread over a period
of five weeks or more in activities connected with crop production .................................. ☐

17d. Test 4: The landlord has done tasks or performed duties which,
considered in their total effect, show that the landlord was materially
and significantly involved in the production of the farm commodities .............................. ☐

18. Conservation Reserve Payments (CRP)
18a. Was the property enrolled in the CRP program?
No ☐ ... Continue to Part I, line 19.
Yes ☐... Continue to Part I, line 18b.

18b. Are you subject to self-employment tax on your CRP income?
No ☐ ... This gain may not be eligible for Iowa capital gain deduction. See instructions.
Yes ☐... Continue to Part I, line 19.

19. Describe in detail by activity (Acres personally farmed, Cash rent/lease, Crop share, CRP, or
Other) the daily, weekly, monthly, and annual duties of the taxpayer associated with the acres
sold during the period covered in line 14. Include the years the taxpayer performed each duty. If
the taxpayer was married during this period, include duties performed by either spouse
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________

Part II: Details of Property Sold

1. Is the capital gain from a C Corporation?
No ☐ ... Continue to Part II, line 3.
Yes ☐... Continue to Part II, line 2.

2. Was the capital gain recognized under IRC 331 or IRC 338?
No ☐ ... Sale is not eligible for Iowa capital gain deduction. Stop.
Yes ☐... Continue to Part II, line 3.

3. Are you the sole owner of this property? Married filers, see instructions.
No ☐ ... Continue to Part II, line 4.
Yes ☐... Enter 100% on Part II, line 4.

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                                                                              2020 IA 100B, page 4 
4. Enter taxpayer’s ownership percentage of the total property sold to three
decimal places (for example 65.2%) ................................................................. 4.  __________ % 

5. Provide all other owner name(s)  ____________________________________________________

6. How did the taxpayer acquire the property? (check all that apply)
Inheritance ☐                                   Like-kind (IRC 1031) Exchange ☐ 
Purchase    ☐                                   Involuntary Conversion ☐ 
Gift  ☐                                         Other  ☐(Explain: _________________________ )

7a. Provide all purchaser name(s)               7b. Purchaser’s relation to taxpayer (If unrelated 
                                                enter “None”) 
 _________________________________              ________________________________________ 
 _________________________________              ________________________________________ 
 _________________________________              ________________________________________ 

8. Is the capital gain from an installment sale?
No  ☐...... Continue to Part II, line 9.
Yes ☐ .... Enter the property installment sale information. 

a. Start date ........................................................ 8a.  _____________ 
b. End date ......................................................... 8b.  _____________ 
c. Total capital gain to be received by taxpayer
     over the life of the installment sale ................. 8c. $ ____________ 
d. Capital gain received by the taxpayer in tax year 2020 .................. 8d. $ _____________ 
9. Iowa capital gain deduction. If the taxpayer meets the holding period
qualifications and material participation qualifications, enter the taxpayer’s
amount of capital gain deduction here and include on IA 1040 line 23  .......  9. $ _____________ 

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2020 IA 100B, page 5

Instructions for 2020 IA 100B – Iowa Capital Gain Deduction for
Sales of Real Property Used in a Farm Business
The Iowa capital gain deduction is subject to Revenue Code (IRC) section 1223, for at least
review by the Iowa Department of Revenue. 10 years to qualify for the Iowa capital gain
The Department will use this form to verify that deduction. For example, the farmland sold may
the taxpayer(s) qualifies for the deduction. The have been acquired in a like-kind exchange or
Department may request additional information an involuntary conversion, and the holding
if needed. period of the farmland sold plus the previously-
held property may be at least 10 years.
This completed form must be included with the
IA 1040 to support the Iowa capital gain Line 14. Complete the table for each of the 10
deduction claimed for sales of real property years prior to the sale. However, the taxpayer
used in a farm business. Complete a separate may instead elect to complete the table for
IA 100B for each sale of farmland. Complete each of the eight years prior to the date
the entire form each year of a qualifying entered in Part I, line 7, 9, 11, or 13.
installment sale, including all parts.
Example 1: The taxpayer sold farmland on an
For taxpayers filing separately on the same installment basis on February 1, 2020. The
return, each spouse must complete an IA 100B taxpayer must complete the table for years
for the Iowa capital gain deduction claimed 2010 to 2019, unless the taxpayer checked
based on the spouse’s ownership percentage “Yes” on Part I, line 6, 8, or 10.
in the property.
Example 2: The taxpayer checked Yes on Part
Flowcharts to assist in determining if a gain I, line 6 and began receiving Old-Age
qualifies are also available in the expanded (retirement) benefits under Social Security on
instructions online. For more information on the February 8, 2016. The taxpayer may elect to
Iowa capital gain deduction, see the complete the table for years 2008 to 2015 even
instructions below and Iowa Administrative if the taxpayer sold the farmland in 2020.
Code rule 701—40.38.
Calendar year: Enter one calendar year on
Part I: Sale of Real Property Used in a Farm each line.
Business
Name of land manager: Enter the name(s) of
Line 1. Enter the address of the farmland, or the person(s) who managed the land in the
enter the legal description of the farmland if no year. Enter “Self” if the taxpayer managed the
address is available. If providing a legal land.
description, also provide a general description
Paid? Enter “Yes” or “No” to indicate whether
of the property location in relation to a major
the reported land manager received any
road or town and the county.
compensation for managing the land in the
Line 2. Enter the total number of acres of year. If there were multiple land managers only
farmland sold. enter “Yes” if any person other than the
taxpayer was compensated.
Line 3. Enter the acquisition date and sale
date for the farmland, as indicated in Federal form or schedule where taxpayer
supporting documentation. reported income: Other than the Federal
1040, enter the specific federal form or
Line 4. Enter the length of the holding period in
schedule number or letter on which the
years and months.
taxpayer reported income from the land in the
Line 5. If the ownership period indicated in respective calendar year. Income from
Part I, line 3 is less than 10 years, explain why farmland is typically reported on federal
the ownership period differs from the holding Schedule E, Schedule F, or Form 4835.
period entered in Part I, line 4. The farmland
must be held, as defined using Internal

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2020 IA 100B, page 6

Acres the taxpayer personally farmed: Enter Line 15b. Check the box to indicate if the
the number of acres of the farmland sold that taxpayer materially participated in the farming
the taxpayer personally farmed in the activity.
respective calendar year. If the taxpayer was Line 16. Crop-Share Arrangement
married during the calendar year, include the
Line 16a. Check the box to indicate if the
acres of the farmland sold that were personally
property was involved in a crop-share
farmed by either spouse.
arrangement.
Cash rent acres: Enter the number of acres of
Line 16b. Check the box to indicate if you are
the farmland sold that the taxpayer leased for
subject to self-employment tax on the crop-
cash rent in the respective calendar year. If the
share income. If income from crop-share
taxpayer was married during the calendar year,
arrangement was reported on federal form
include the acres of the farmland sold that
4835, the income was not subject to self-
were leased for cash rent by either spouse.
employment tax and therefore may not be
Crop share acres: Enter the number of acres eligible for Iowa capital gain deduction unless
of the farmland sold that the taxpayer had the taxpayer qualifies as a retired or disabled
under a crop share lease arrangement in the farmer as described in Iowa Administrative
respective calendar year. If the taxpayer was Code rule 701–40.38(1)“f”(1),.
married during the calendar year, include the
Line 17. The taxpayer must satisfy at least one
acres of the farmland sold that were under a
of the four tests for material participation for
crop share lease agreement by either spouse.
each of the 10 years prior to the sale. Check
CRP acres: Enter the number of acres of the the box for each test claimed. More than one
farmland sold that the taxpayer had enrolled in test may be claimed. For more information on
the Conservation Reserve Program (CRP) in the tests for material participation, see the
the respective calendar year. If the taxpayer instructions below and Iowa Administrative
was married during the calendar year, include Code rule 701–40.38(1)“f”(5).
the acres of the farmland enrolled in CRP by
• TEST 1. The landlord does any three of
either spouse.
the following: (1) Pays or is obligated to
Other acres: Enter the number of acres of the pay for at least half the direct costs of
farmland sold that the taxpayer used for other producing the crop; (2) Furnishes at least
purposes in the respective calendar year, such half the tools, equipment, and livestock
as non-tillable acres. If the taxpayer was used in producing the crop; (3) Consults
married during the calendar year, include the with the tenant; and (4) Inspects the
acres of the farmland sold that were used for production activities periodically.
other purposes by either spouse. • TEST 2. The landlord regularly and
Note: The sum of the acres the taxpayer frequently makes, or takes part in making,
personally farmed, the cash rent acres, the management decisions substantially
crop share acres, the CRP acres, and the other contributing to or affecting the success of
acres must equal the total number of acres the enterprise.
sold as entered in Part I, line 2. • TEST 3. The landlord worked 100 hours
or more spread over a period of five
Line 15. Cash Rent/Lease Arrangement
weeks or more in activities connected with
Line 15a. Check the box to indicate if the crop production.
property was rented on a cash rent/lease • TEST 4. The landlord has done tasks or
basis. A farmer who rents farmland on a cash performed duties which, considered in
basis will not generally be considered to be their total effect, show that the landlord
materially participating in the farming activity. was materially and significantly involved in
The burden is on the landlord to show there the production of the farm commodities.
was material participation in the cash
rent/lease farm activity.

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2020 IA 100B Instructions, page 7

Line 18. Conservation Reserve Payments Line 3. If married filing jointly and both spouses
(CRP) are the only owners, check yes. If married filing
separately and both spouses are owners, check
Line 18a. Check the box to indicate if the no; each spouse must complete an IA 100B and
property was enrolled in a CRP program. indicate on line 3 the separate ownership
Line 18b. Check the box to indicate if the percentage of that spouse.
income from the CRP program was subject to Line 4. Enter the taxpayer’s ownership
self-employment tax. If an individual is percentage of the property sold at the time of
receiving CRP payments and is not considered the sale to three decimal places (for example:
to be retired from farming or disabled as 50.0%; 33.3%). If not the sole owner, the
described in Iowa Administrative Code rule taxpayer’s ownership percentage must be less
701–40.38(1)“f”(1), the CRP payments are than 100% and greater than 0%.
subject to self-employment tax. If individuals
actively manage farmland placed in the CRP Line 5. Enter the names of all persons and
program by directly participating in seeding, entities that owned the property at the time of
mowing, and planting the farmland or by sale. If the capital gain flowed through to the
overseeing these activities and the individual is taxpayer from a partnership, S corporation,
paying self-employment tax, the owner will be limited liability company (LLC), estate, or trust,
considered to have had material participation in all owners of the entity must be reported.
the farming activity. Annual CRP payments Line 6. Check all boxes that indicate how the
paid to taxpayers receiving Social Security or taxpayer acquired the property. If “Other”,
disability payments are generally not subject to explain how the taxpayer acquired the
self-employment tax and therefore are not property.
eligible for the Iowa capital gain deduction
Line 7. Enter the names of all persons and
unless the taxpayer qualifies as a retired or
entities that purchased the property.
disabled farmer. For more information on the
requirements for material participation with Line 8. Check the box to indicate whether the
regard to CRP, see Iowa Administrative Code capital gain comes from an installment sale. If
rule 701–40.38(1)“f”(6). “Yes,” enter the date of the first installment, the
expected date of the final installment, the total
Line 19. Enter the taxpayer’s daily, weekly,
capital gain generated by the sale, and the
monthly, and yearly farming activities on the
capital gain the taxpayer received during tax
farmland sold during the period identified in
year 2020. Do not include any interest
Part I, line 14. Describe the activities in detail,
received.
and include the year(s) the taxpayer performed
the activities. Do not include activities Line 9 Enter the amount of the taxpayer’s
performed by any person other than the capital gain deduction claimed. Note that the
taxpayer, such as tenants and farm hands. The deduction applies to the net capital gain from a
taxpayer’s activities must be supported by sale. Any nonrecaptured losses are treated as
records. Records prepared long after the ordinary income and are not eligible for the
activity generally are not acceptable. Iowa capital gain deduction. The eligibility of
the Iowa capital gain deduction reported here
Part II: Details of Property Sold
may be subject to further examination by the
Line 1. Check the box to indicate whether the Department.
capital gain is from a C corporation.
Line 2. Indicate whether the C corporation
capital gain was from the liquidation of assets
which are recognized as a sale of assets
under IRC section 331 or from certain stock
sales which are treated as an acquisition of
assets under IRC section 338.

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