Read the full stored bill text
Senate
File
19
-
Introduced
SENATE
FILE
19
BY
SWEENEY
A
BILL
FOR
An
Act
relating
to
the
farm
tenancy
net
income
exclusion
1
available
against
the
individual
income
tax,
and
including
2
effective
date
and
retroactive
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
422.7,
subsection
14,
paragraph
e,
Code
1
2025,
is
amended
by
striking
the
paragraph
and
inserting
in
2
lieu
thereof
the
following:
3
e.
Net
income
from
a
farm
tenancy
agreement
earned,
4
received,
or
reported
by
an
entity
taxed
as
a
disregarded
5
entity,
partnership
for
federal
tax
purposes,
an
S
corporation,
6
a
trust,
or
estate
is
eligible
for
the
election
and
deduction
7
in
this
subsection
for
the
portion
of
net
income
derived
from
8
a
farm
tenancy
agreement
if
the
eligible
individual
receives
9
or
is
entitled
to
receive
the
portion
of
net
income
through
10
distributions
from
an
entity
taxed
as
a
disregarded
entity,
11
a
partnership,
an
S
corporation,
a
trust,
or
an
estate,
to
12
the
same
extent
that
an
eligible
individual
could
subtract
13
net
income
received
directly
from
the
farm
tenant
rather
than
14
passing
to
the
eligible
individual
through
an
entity
taxed
15
as
a
disregarded
entity,
a
partnership,
an
S
corporation,
a
16
trust,
or
an
estate.
For
purposes
of
this
paragraph,
net
17
income
accruing
to
a
grantor
trust
or
to
a
business
entity
18
that
is
a
disregarded
entity
shall
be
deemed
to
have
been
19
distributed
to
its
sole
owner
to
the
extent
the
sole
owner
of
20
such
disregarded
entity
or
trust
has
the
right
to
withdraw
or
21
compel
distribution
of
such
net
income.
22
Sec.
2.
EFFECTIVE
DATE.
This
Act,
being
deemed
of
immediate
23
importance,
takes
effect
upon
enactment.
24
Sec.
3.
RETROACTIVE
APPLICABILITY.
This
Act
applies
25
retroactively
to
January
1,
2024,
for
tax
years
beginning
on
26
or
after
that
date.
27
EXPLANATION
28
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
29
the
explanation’s
substance
by
the
members
of
the
general
assembly.
30
Current
law
excludes
from
the
individual
income
tax
a
31
retired
farmer’s
total
net
income
received
pursuant
to
a
32
farm
tenancy
agreement
covering
real
property
held
by
the
33
retired
farmer
for
10
or
more
years,
if
the
farmer
materially
34
participated
in
a
farming
business
for
10
or
more
years.
Under
35
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current
law,
net
income
from
a
farm
tenancy
agreement
earned
by
1
an
entity
taxed
as
a
partnership
for
federal
tax
purposes,
an
S
2
corporation,
or
a
trust
or
estate
is
not
eligible
for
the
farm
3
tenancy
lease
income
exclusion.
4
This
bill
allows
the
net
income
from
a
farm
tenancy
5
agreement
earned,
received,
or
reported
by
an
entity
taxed
as
a
6
disregarded
entity,
partnership
for
federal
tax
purposes,
an
7
S
corporation,
a
trust,
or
estate
to
be
eligible
for
the
farm
8
tenancy
lease
income
exclusion
in
the
same
manner
as
if
the
9
net
income
received
pursuant
to
a
farm
tenancy
passes
directly
10
from
the
farm
tenant
to
the
eligible
individual
rather
than
11
passing
to
the
eligible
individual
through
an
entity
taxed
as
a
12
disregarded
entity,
a
partnership,
an
S
corporation,
a
trust,
13
or
an
estate.
The
bill
allows
net
income
accruing
to
a
grantor
14
trust
or
to
a
business
entity
that
is
a
disregarded
entity
15
to
be
deemed
to
have
been
distributed
to
its
sole
owner
to
16
the
extent
the
sole
owner
of
such
disregarded
entity
or
trust
17
has
the
right
to
withdraw
or
compel
distribution
of
such
net
18
income.
19
The
bill
takes
effect
upon
enactment
and
applies
20
retroactively
to
tax
years
beginning
on
or
after
January
1,
21
2024.
22
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