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Kentucky Farmland Transition Initiative
- KWOA
- Jul 9
- 5 min read
Updated: Jul 28
Updated July 28, 2025
Find all the latest details on the Kentucky Selling Farmer Tax Credit at the site linked below.
Updated July 9, 2025
Federal Legislation
We are pleased to see the inclusion of capital gains tax relief (Sec. 70437 - Treatment of Capital Gains from the Sale of Certain Farmland Property). Senator McConnell’s July 7, 2025 press release with more information can be found here.
Gives farmers the ability to manage their tax liability
This bill contains language that gives farmers the ability to manage their tax liability when they sell farmland to other farmers. By spreading out capital gains over multiple years, farmers can avoid the huge tax hit in the year of sale.
Rewards farmers and farmland owners who are seeking to keep land in production
By helping these property owners defer most of the payment of the capital gains when they sell the property, it gives them a reward for selling to farmers who will keep that land farming.
First tax treatment based on land staying in production
This is the first time, we are aware of, that a provision has been included to modify the tax treatment on capital gains on real property that depends on the property staying in the hands of active farmers.
Starts the ball rolling
This provision is a starting point that we can build on to continue to look for ways to incentivize working farmers keeping land in production.
State Legislation
After a few months of communication with the Kentucky Cabinet for Economic Development, we are pleased to inform you that the new guidelines for the Kentucky Selling Farmer Tax Credit (KSFTC) are posted and public. See updated KSFTC website here. For updated guidelines, simply click “KSFTC Guidelines” at the bottom of the page or direct link can be found here.
By way of background, House Bill 775 updates the KSFTC to allow the following:
Redefines “seller” to ensure all owners of farmland can participate, including those who live outside of Kentucky
Defines “actively engaged farmer” to ensure all farmers can participate as buyers.
Redefines “beginning farmer” as a farmer with less than twenty years of ownership experience. Previous law was limited to ten years.
Establishes a tax incentive for a sale to an active farmer at a maximum tax credit of $25,000 per year or $100,000 per lifetime.
Doubles the tax incentive if the sale is made to a beginning farmer for a maximum of $50,000 per year and $200,000 per lifetime.
Increases the buyer commitment to keeping the land in production agriculture from five to ten years.
Establishes language protecting the seller from owing taxes if the buyer does not keep the land in production by shifting the liability to the buyer.
Sunsets the program on December 31, 2031.
Updated March 24, 2025
The Kentucky Farmland Transition Initiative is working on a number of fronts to increase the incentives for land to stay in the hands of active farmers:
In the Kentucky General Assembly, HB 703 was introduced by Representative Myron Dossett to make changes to the Kentucky Selling Farmer Tax Credit to make the credit work for more farmers and provide greater certainty for sellers. Provisions of this bill were included in HB 775 sent to the Governor's desk for signature.
In Congress, S. 930 was introduced by U.S. Senator Mitch McConnell to create a federal tax provision similar to the Kentucky state credit if land is sold to actively engaged farmers and the gains from the sale are invested in a retirement account.
Through these measures and others, we hope to find new ways to keep land in production.
Pulling Together Your Records: This publication from the University of Kentucky covers what records you need to pull together to help make the plans for your estate and farm.
KET Call-in Show on Estate Planning: KET's call-in shows with attorneys, estate planners, and other experts answer a number of estate planning questions.
Starting the Conversation: How do you have conversations about farm transitions? This guide offers some tips for both farm owners and people who want to farm the land.
Upcoming Events and Opportunities to Talk About Farmland Transition
Farmer meeting season is slowing down as spring arrives, but feel free to reach out directly if you are looking for resources, have questions, or are looking for a speaker to talk about farmland transition with your group.
April 8 -- Ag Credit Lunch and Learn in Marion County
Updated April 2024
In April 2024, Kentucky Farm Bureau (KFB) launched the Kentucky Farmland Transition Initiative (KFTI) with a goal of helping farm families find ways to keep their acreage in active agricultural production as they consider the future of that land. At the buttons below are resources and updates regarding the initiative.
Since that launch, the website for the Initiative, www.kyfarmlandtransition.com, has been viewed by over 3,600 visitors. Talks and presentations on the Initiative have been given at all July KFB Policy Development District meetings, KFB Advisory Committees, numerous county extension programs, and commodity organization events. KFB also formed the KFTI Network. The Network consists of organizations, businesses, and institutions across Kentucky who are interested in, or working on, this issue. Their objective is to spread the word about the resources available and provide feedback on what measures need to be taken to preserve farmland. To date, there are 26 members of the KFTI Network.
As the policy development season continues, we are focused on education and sharing resources. Attached you will find the two most recent documents: KFTI Frequently Asked Questions and Options for Organizations to Incorporate Farmland Transition into Their Programming. These, along with numerous other resources, are available at www.kyfarmlandtransition.com/resources. We encourage you to explore these documents and find ways to utilize them in your operation and community.
KFB is a member-led, member-driven, grassroots organization. When we come together to look at issues, we always look for ways that we, as an organization, can help, and my hope is that you will continue to help promote this initiative, utilize it for your own needs, and reach out if you have any suggestions or comments as we move forward.
April 2024
KWOA joins the Kentucky Farmland Transition Initiative (KFTI). Many members are concerned about preserving forests for our future and have expressed concerns about preventing the transition of our lands to non-agricultural/woodland purposes. Part of the issue relates to personal estate planning tools. Another aspect relates to having incentives in place to encourage future owners to continue the productivity and conservation of the land. KWOA began a 3-part Legacy Series in our Fall Kentucky Woodlands Newsletter.
