Congress quietly carves out capital gains tax break for farm families
H.R. 8591 — No Capital Gains Tax on Family Farms Act · Filed by Thomas Massie (R-KY) · 11 cosponsors · Introduced Apr 30, 2026 · Referred to committee
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What it does
This bill creates a new tax exemption allowing farmers to sell farm property to family members (spouse, children, grandchildren, in-laws) without paying federal capital gains tax on the appreciation. If the family member holds the property for 10 years without selling, their tax basis is stepped up to fair-market value, permanently erasing any tax on the original appreciation. The exemption applies to any farm property that was actively farmed for at least 2 of the past 8 years, with no size or value limits.
Why we flagged it
The bill creates a new capital gains tax exclusion (IRC §121A) for sales of qualified farm property to family members. It is fundamentally a tax-code amendment targeting agricultural wealth transfer, not a commemorative or vanity measure.
What the text implies
- Eliminates capital gains tax on farm-to-family transfers indefinitely, creating a permanent wealth-transfer advantage for agricultural families compared to non-farm families or those selling other appreciated assets.
- The 10-year holding-period basis-step-up provision (subsection (c)(1)(B)) allows a qualified family member to receive a fair-market-value basis increase after 10 years without sale, effectively deferring and then erasing tax liability on appreciation during that decade.
The full analysis lists 5 implications of this text.
Who stands to gain
agricultural landowners; family farm operators; agricultural real estate investors