To amend the Internal Revenue Code of 1986 to provide that the exclusion of gain on sale of a principal residence shall apply to certain farmland sold with the principal residence.

Amends the Internal Revenue Code to extend the exclusion of gain on the sale of a principal residence to qualified farmland sold with the residence.

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4421 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4421

    To amend the Internal Revenue Code of 1986 to provide that the 
   exclusion of gain on sale of a principal residence shall apply to 
          certain farmland sold with the principal residence.


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                    IN THE HOUSE OF REPRESENTATIVES

                              May 10, 2000

 Mr. Watkins introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide that the 
   exclusion of gain on sale of a principal residence shall apply to 
          certain farmland sold with the principal residence.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXCLUSION FOR FARMLAND SOLD WITH PRINCIPAL RESIDENCE.

    (a) In General.--Section 121 of the Internal Revenue Code of 1986 
(relating to exclusion of gain from sale of principal residence) is 
amended by redesignating subsections (e), (f), and (g) as subsections 
(f), (g), and (h), respectively, and by inserting after subsection (d) 
the following new subsection:
    ``(e) Exclusion To Apply to Farmland Sold With Residence.--
            ``(1) In general.--If, as part of the sale or exchange of 
        the taxpayer's principal residence, the taxpayer also transfers 
        qualified farmland to the transferee of such residence, this 
        section shall apply to gain on the sale or exchange of such 
        farmland in the same manner as if such farmland were part of 
        the taxpayer's principal residence.
            ``(2) Qualified farmland.--For purposes of this subsection, 
        the term `qualified farmland' means any land (and structures 
        located thereon) if--
                    ``(A) such land is contiguous to the taxpayer's 
                principal residence, and
                    ``(B) throughout the 10-year period ending on the 
                date of the sale or exchange--
                            ``(i) such land and structures were owned 
                        by the taxpayer or a member of the taxpayer's 
                        family and used as a farm for farming purposes 
                        by the taxpayer or a member of the taxpayer's 
                        family, and
                            ``(ii) there was material participation by 
                        the taxpayer or a member of the taxpayer's 
                        family in the operation of such farm.
        Terms used in subparagraph (B) which are also used in section 
        2032A shall have the respective meanings given such terms in 
        section 2032A.''
    (b) Effective Date.--The amendment made by this section shall apply 
to sales and exchanges after the date of the enactment of this Act.
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