Estimated Tax Penalty Waiver for Farm Sales

Gain from the sale of farmland after July 4, 2025, can be spread over 4 years if certain conditions are met and an election is made. Pursuant to an election, the first installment is due for the year of the sale. So, if a sale closed in 2025 and an election was made, one-fourth of the gain needs to be taken into account for estimated tax purposes. But the IRS will waive underpayment penalties for 2025. The amount of the relief depends on the amount of income tax for which payment is deferred by the election. #IdeaoftheDay

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