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Form 1062: Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers
IRS Form 1062 is used for Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers. Individuals and entities must file it no later than the due date for the income tax return for the year of the qualified sale or exchange.
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IRS Form 1062 - Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers
IRS Form 1062 is used for Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers. Individuals and entities must file it no later than the due date for the income tax return for the year of the qualified sale or exchange.
Risk Radar
Scan points- 1Failure to attach the required Section 1062 covenant(s) alongside Form 1062 is a critical filing error.
- 2Filing without attaching a copy of the respective section 1062 covenant(s).
- 3Not completing a separate Schedule A, even if making multiple elections.
- 4Entering figures on Form 1062 when the property does not qualify (i.e., answering 'No' to any question on lines 4-8 of Schedule A).
- 5Failing to enter -0- on line 14 if the total section 1062 applicable net tax liability is zero or less.
Plain English
This form allows a taxpayer to elect to spread out the payment of taxes owed from selling farmland to another qualifying farmer over four equal years. By filing Form 1062, the taxpayer officially chooses this deferral option and reports details about the property and the tax liability.
Submission Date
- Filing date: 2026-04-15 20:10:42
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when an individual or entity elects under section 1062 to defer payment of net income tax attributable to gain from a qualified sale or exchange of qualified farmland property in four equal annual installments.
- Do not use it when the sale or exchange is not a qualified sale or exchange, as determined by answering questions on lines 4 through 8 (where 'No' to any question means it does not qualify).
- Check Schedule A (Form 1062) instead when reporting each individual qualified sale or exchange for which the taxpayer wants to elect under section 1062.
Form selector
Use this form or another form?
Partnership/S Corp Shareholder
Use information from this schedule to complete lines 1–8 of Form 1062.
✓ Confirm that the partnership or S corporation's Schedule A is attached.
C Corporation, Trust, or Estate
Acceleration of installments occurs upon events like liquidation, sale of substantially all assets, or cessation of business.
✓ Ensure a copy of the relevant covenant is included with Form 1062.
Tax Year Beginning After July 4, 2025
A new election option allows payment in four equal annual installments beginning in the year of the qualified sale or exchange.
✓ Verify that your tax year falls into this post-July 4, 2025 window.
Deadline or filing window
The election must be made by filing Form 1062 no later than the due date for the income tax return of the year the qualified sale or exchange occurs. The first installment payment is due by the income tax return due date (without regard to extension) for that same tax year.
Checklist
What you need before filling it out
Total number of Schedules A (Form 1062)
The total count of attached Schedule A forms · Form 1062, Line for Total Number
Gross proceeds from qualified sale/exchange
The dollar amount of the gross proceeds · Part II, Line 9 (Form 1062)
Filer Category (Individual/Entity)
Determine if you are an individual or entity electing deferral. · Form 1062 Header
Installment Payment Dates
The specific due dates for the four equal annual installments. · Instructions p.1, Date for payment of installments section
Definition of Farm
Must include livestock, dairy, poultry, fruit, fur-bearing animal, truck farms, plantations, ranches, nurseries, ranges, greenhouses or similar structures used primarily for raising agricultural or horticultural commodities, and orchards/woodlands. · Instructions p.1, Definition section
Before you submit
- 1Verify that you have completed all necessary lines on Form 1062 to elect deferral under section 1062.
- 2Ensure you have attached a separate Schedule A (Form 1062) for every qualified sale or exchange being reported.
- 3Confirm the total number of Schedules A (Form 1062) entered on Form 1062 matches the actual count of attachments.
- 4If applicable, verify that Part II is completed and Line 9 shows the gross proceeds from the qualified sale or exchange.
- 5Check that you have included a copy of the respective section 1062 covenant(s) with your filing.
- 6Confirm that if an individual taxpayer dies, the installment due date aligns with the deceased taxpayer’s final income tax return for the relevant year.
- 7Verify that the first installment payment is scheduled to be paid by the income tax return due date (without regard to extension) for the year of sale/exchange.
How to file this form
- 1Complete Form 1062, entering the total number of Schedules A (Form 1062) you are filing.
- 2For each qualified disposition, complete a separate Schedule A (Form 1062), ensuring lines 4 through 8 confirm qualification.
- 3If qualifying, complete Part II on Form 1062 and enter the gross proceeds from the sale or exchange on Line 9.
- 4Attach all completed Schedule(s) A (Form 1062) to Form 1062 and include a copy of the respective section 1062 covenant(s).
- 5File Form 1062, along with its attachments, by the due date for your income tax return (including extensions).
Known limitations
- 1Partnerships and S corporations do not file Form 1062 directly; instead, they must file Schedule A (Form 1062) with their return.
- 2If a partnership or S corporation has a qualified sale or exchange, the section 1062 election is made at the partner or shareholder level.
- 3A farm includes livestock, dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for raising of agricultural or horticultural commodities, and orchards and woodlands.
Field map
Compact field-by-field guide
General Info
2 items
Full legal name and taxpayer identification number (SSN or EIN).
Current mailing address.
Details
2 items
Complete all applicable sections of this form according to the official IRS instructions.
Enter the relevant dollar amount if this form involves tax calculation.
Certification
1 items
Read and acknowledge any certifications required by this form.
Signatures
1 items
Sign and date. Unsigned forms cannot be processed.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is December 2025, and users should check IRS.gov/Form1062 for the latest information regarding developments related to Form 1062.
What changed or needs a fresh check
- Edition date — confirm it reads December 2025.
- Form Number — confirm it is Form 1062.
- Catalog Number — confirm it is 95897L.
- Attachment Sequence No. — confirm it is 106.
- OMB No. — confirm it is 1545-0074.
Quick Facts
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After you file
- 1Keep a copy of Form 1062 and Schedule A (Form 1062) on file as long as their contents may become material in the administration of any Internal Revenue law.
- 2If filing for an individual, ensure you attach Form 1062, Schedule(s) A (Form 1062), and a copy of the respective section 1062 covenant(s) to your income tax return by the due date.
- 3For installment payments, each succeeding installment must be paid by the income tax return due date for the 3 subsequent years (without regard to any extension).
- 4If an addition to tax occurs because of failure to timely pay an installment required under section 1062, the unpaid portion of all remaining installments is due on the date of that failure.
Sources
- SRCInstructions p.1 — The purpose of Form 1062 is to defer tax on gain from the sale or exchange of qualified farmland property to qualified farmers.
- SRCInstructions p.1 — For partnerships and S corporations, the section 1062 election must be made at the partner or shareholder level.
- SRCInstructions p.3 — To determine qualification, answers to questions on lines 4 through 8 must all be 'Yes' to qualify for the deferral under section 1062.
- SRCInstructions p.3 — Part II—Recognized Gain on Qualified Farmland Property requires entering the gross proceeds from the qualified sale or exchange on line 9.
- SRCForm p.1 — Line 14 of Form 1062 must have 25% (0.25) entered onto Form 1120, line 32, or the applicable line of your return.
- SRCInstructions p.1 — The new installment election allows taxpayers to pay the tax in four equal annual installments starting in the year of the qualified sale or exchange.
Common confusion points
Who needs to file Form 1062?
Individuals and entities must file it; partnerships or S corporations file Schedule A (Form 1062) instead.
→ Check if you are filing as an individual/entity, or if your entity is a partnership/S corp.
What happens when I make the election?
You elect to pay the net income tax attributable to gain in four equal annual installments starting in the year of the qualified sale or exchange.
→ Confirm this installment plan matches your desired payment schedule.
Do I need to file more than one Schedule A?
Yes, complete a separate Schedule A (Form 1062) and include a copy of the covenant for each qualified sale or exchange where you make the election.
→ Count how many distinct property sales/exchanges require an election.
What if my company is a partnership or S corp making the election?
The partner or shareholder who elects must file Form 1062 and complete Schedule A (Form 1062).
→ Verify which specific partner or shareholder is electing, as they are responsible for filing.
Where do I put the 25% calculation?
Enter 25% of line 14 on Form 1062 onto Form 1120, line 32, or the applicable line of your return.
→ Ensure you calculate and place this percentage correctly on the designated lines.
What triggers an acceleration of payments?
If there is an addition to tax for failure to timely pay any installment required under section 1062, the unpaid portion of all remaining installments becomes due immediately on the date of that failure.
→ Check your payment history against the IRS notices for additions to tax.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Section 1062 covenant(s) — These must be filed along with Form 1062 and Schedule A (Form 1062).
Questions about IRS Form 1062
What is IRS Form 1062 used for?
This form allows a taxpayer to elect to spread out the payment of taxes owed from selling farmland to another qualifying farmer over four equal years. By filing Form 1062, the taxpayer officially chooses this deferral option and reports details about the property and the tax liability.
Who must file IRS Form 1062?
Individuals and entities that elect to defer payment of the net income tax attributable to gain from a qualified sale or exchange must file Form 1062.
What information does IRS Form 1062 require?
The form collects information on each qualified farmland property, reports the total section 1062 applicable net tax liability (on line 14), and calculates the amount of the first installment due. Part II refigures net income tax without regard to gain recognized from qualified sales or exchanges.
When is IRS Form 1062 due?
The filing deadline is no later than the due date for the income tax return for the year of the qualified sale or exchange, including extensions.
Where do I file IRS Form 1062?
Taxpayers must attach Form 1062, Schedule(s) A (Form 1062), and a copy of the respective section 1062 covenant(s) to their income tax return for filing.
How do I complete IRS Form 1062?
First, complete Schedule A (Form 1062) to determine qualification. If qualified, proceed to Part II, entering gross proceeds on line 9. Then, calculate your total net income tax in Part I and use those figures to find your total section 1062 applicable net tax liability on line 14.
What happens if IRS Form 1062 is filed incorrectly?
If an addition to tax is assessed for failure to timely pay any installment required under section 1062, the unpaid portion of all remaining installments becomes due on the date of that failure.
Who needs to file Form 1062?
Individuals and entities must file it; partnerships or S corporations file Schedule A (Form 1062) instead. Check if you are filing as an individual/entity, or if your entity is a partnership/S corp.
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