
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1252]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                 Subchapter P--Capital Gains and Losses
 
     PART IV--SPECIAL RULES FOR DETERMINING CAPITAL GAINS AND LOSSES
 
Sec. 1252. Gain from disposition of farm land


(a) General rule

                         (1) Ordinary income

        Except as otherwise provided in this section, if farm land which 
    the taxpayer has held for less than 10 years is disposed of during a 
    taxable year beginning after December 31, 1969, the lower of--
            (A) the applicable percentage of the aggregate of the 
        deductions allowed under sections 175 (relating to soil and 
        water conservation expenditures) and 182 (relating to 
        expenditures by farmers for clearing land) for expenditures made 
        by the taxpayer after December 31, 1969, with respect to the 
        farm land or
            (B) the excess of--
                (i) the amount realized (in the case of a sale, 
            exchange, or involuntary conversion), or the fair market 
            value of the farm land (in the case of any other 
            disposition), over
                (ii) the adjusted basis of such land,

    shall be treated as ordinary income. Such gain shall be recognized 
    notwithstanding any other provision of this subtitle.

                            (2) Farm land

        For purposes of this section, the term ``farm land'' means any 
    land with respect to which deductions have been allowed under 
    sections 175 (relating to soil and water conservation expenditures) 
    or 182 (as in effect on the day before the date of the enactment of 
    the Tax Reform Act of 1986).

                      (3) Applicable percentage

        For purposes of this section--


                                                        The applicable
         If the farm land is disposed of--             percentage is--

  Within 5 years after the date it was acquired....         100 percent.
  Within the sixth year after it was acquired......          80 percent.
  Within the seventh year after it was acquired....          60 percent.
  Within the eighth year after it was acquired.....          40 percent.
  Within the ninth year after it was acquired......          20 percent.
  10 years or more years after it was acquired.....           0 percent.


(b) Special rules

    Under regulations prescribed by the Secretary, rules similar to the 
rules of section 1245 shall be applied for purposes of this section.

(Added Pub. L. 91-172, title II, Sec. 214(a), Dec. 30, 1969, 83 Stat. 
572; amended Pub. L. 94-455, title XIX, Secs. 1901(b)(3)(K), 
1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1793, 1834; Pub. L. 98-369, div. 
A, title IV, Sec. 492(b)(5), July 18, 1984, 98 Stat. 854; Pub. L. 99-
514, title IV, Sec. 402(b)(2), Oct. 22, 1986, 100 Stat. 2221.)

                       References in Text

    The date of the enactment of the Tax Reform Act of 1986, referred to 
in subsec. (a)(1)(A), is the date of enactment of Pub. L. 99-514, which 
was approved Oct. 22, 1986. Section 402(a) of the Tax Reform Act of 1986 
repealed section 182 of this title.


                               Amendments

    1986--Subsec. (a)(1)(A). Pub. L. 99-514 substituted ``(as in effect 
on the day before the date of the enactment of the Tax Reform Act of 
1986)'' for ``(relating to expenditures by farmers for clearing land)''.
    1984--Subsec. (a)(1). Pub. L. 98-369 struck out ``, except that this 
section shall not apply to the extent section 1251 applies to such 
gain'' after ``of this subtitle'' in last sentence.
    1976--Subsec. (a)(1). Pub. L. 94-455, Sec. 1901(b)(3)(K), 
substituted ``ordinary income'' for ``gain from the sale or exchange of 
property which is neither a capital asset nor property described in 
section 1231''.
    Subsec. (b). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or 
his delegate'' after ``Secretary''.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-514 applicable to amounts paid or incurred 
after Dec. 31, 1985, in taxable years ending after such date, see 
section 402(c) of Pub. L. 99-514, set out as an Effective Date of Repeal 
note under former section 182 of this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to taxable years beginning 
after Dec. 31, 1983, see section 492(d) of Pub. L. 98-369, set out as a 
note under section 170 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1901(b)(3)(K) of Pub. L. 94-455 effective for 
taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. 
L. 94-455, set out as a note under section 2 of this title.


                             Effective Date

    Section 214(c) of Pub. L. 91-172 provided that: ``The amendments 
made by this section [enacting this section] shall apply to taxable 
years beginning after December 31, 1969.''

                  Section Referred to in Other Sections

    This section is referred to in sections 170, 341, 751 of this title.
