2024 Iowa tax law change Retroactive to 01/01/2023

[The_AntiTax_Man]

@taxiowa  @Flinders @Royal  

HF2649 has passed the Iowa House in March 2024, and passed the Iowa Senate on April 19th, 2024, and Iowa Gov Kim likely to sign into law.  April 30th Iowa filing deadline is next Tuesday. Nice...

House File 2649

HOUSE FILE 2649 BY COMMITTEE ON WAYS AND MEANS (SUCCESSORTOH SB680) (As Amended and Passed by the House March 19, 2024)

A BILL FOR An Act excluding the net capital gain from the sale of certain

1 livestock from the computation of net income for purposes

2 of the individual income tax, and including retroactive

3 applicability provisions.

4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

5 HF2649(2)90jm/jh/md

H.F.2649Section1.Section422.7,Code2024,isamendedbyadding

1 the following new subsection:

2 NEW SUBSECTION. 44.a. For purposes of this subsection,

3 “held” shall be determined with reference to the holding period

4 provisions of section 1223 of the Internal Revenue Code and the 

5 federal regulations pursuant there to.

6 b. Subtract the net capital gain from the following:

7(1) The sale of cattle or horses held by the tax payer for

8 breeding, draft, dairy, or sporting purposes for a period 

9 of twenty-four months or more from the date of acquisition,

10 but only if the tax payer received more than one-half of the 

11 taxpayer’s gross income from farming or ranching operations

12 during the tax year.

13(2)The sale of breeding livestock, other than cattle or

14 horses, held by the taxpayer for a period of twelve months or

15 more from the date of acquisition, but only if the taxpayer

16 received more than one-half of the taxpayer’s gross income from

17 farming or ranching operations during the tax year

18c. A retired farmer as defined in subsection13 is not

19 eligible for the exclusion in this subsection if taking the

20 exclusion allowed in subsection 13, paragraph “c” or “d”, in the

21 same tax year.

22 Sec. 2. RETROACTIVE APPLICABILITY. This Act applies

23 retroactively to January 1, 2023, for tax years beginning on

24 or after that date

[IRonMaN]

Luckily, Minnesota never does anything that stupid.  They usually pass those retroactive things around the end of March or the first week of April to give tax preparers plenty of time to handle the changes.  It looks like Iowa is trying to one up Minnesota on those retroactive changes.

[BobKamman]

It's not how close to the filing date of April 30 that matters.  It's how close they are to November 5, when they need all the money they can get from these race horse breeders and other salt-of-the-earth types that inhabit Iowa.   

[taxiowa]

Yes this just proves we do have idiots (mostly Republicans) in the statehouse.  Do ya think they are doing farmers who had to file by March 1st a favor, by passing a law helping them on April 23rd.  Because thy will be charged handsomely for their $150 to $600 amended return refund.  No farmers, (who are the only ones to qualify), have not filed by now.

[dkh]

As if you have nothing better to do than amending returns for retroactive law changes.   Ugh!!

[The_AntiTax_Man]

@IntuitGabi  can you forward this on to the ProSeries IA1040 module programmer.  I have been indirectly told that The Iowa Dept of Revenue would be making a post regarding this on their website in the coming days.  Please post what you learn on this thread,

[The_AntiTax_Man]

New Iowa Form 100A is Ready for Those Claiming 2023 Iowa Capital Gain Deduction for Sale of Breeding or Dairy Livestock

 June 7, 2024 |  Kristine A. Tidgren

On Thursday, June 6, 2024, the Iowa Department of Revenue announced that the revised 2023 Form IA 100A (Iowa Capital Gain Deduction – Cattle, Horses, or Breeding Livestock) is ready to file.

HF 2317, passed in 2022, limited the Iowa capital gain deduction to apply to gain from the sale of “Real property used in a farming business,” beginning in tax year 2023. Except for a narrow provision allowing retired farmers to exclude capital gain from the sale of breeding or dairy livestock when they liquidated their herds, the law eliminated the long-standing capital gain exclusion for the sale of certain livestock for non-retired farmers.

House File 2649, signed by the Governor on May 15, 2024, restores this deduction, allowing taxpayers to exclude capital gain from the sale of certain livestock from the computation of net income for individual income tax purposes. This law, applying to those farmers who earn more than 50 percent of their gross income from farming, applies retroactively to include the 2023 tax year.

Taxpayers wishing to claim this deduction for tax year 2023 may file an original, or amended, individual income tax return on paper and include the newly revised IA 100A (Iowa Capital Gain Deduction – Cattle, Horses, or Breeding Livestock) form.

[IRonMaN]

And the wait begins for ProSeries?

[The_AntiTax_Man]

@IntuitGabi  please forward this on to the ProSeries IA1040 module software programmer. 

Here is a link to the recently update Form 2023 IA 100A:  IA 100A Iowa Capital Gain Deduction - Cattle, Horses or Breeding Livestock, 41-155

[The Part I: Details of Sale answers have been changed on this updated form.]

...

Extended returns and amended Iowa returns require guidance.  @IntuitGabi  will this updated Form 2023 IA 100A be included into the PS23 Iowa module?  IF not, what is the Intuit workaround for this issue?  Please reply.

[The_AntiTax_Man · Accepted solution]

UPDATE:  Iowa Form 100A Iowa Capital Gain Deduction - Cattle, Horses, or Breeding Livestock

It appears that Form 100A in the ProSeries 2023 Iowa Module has been updated.

Thank you to PS23 Iowa Module programmers and  @IntuitGabi