Missouri Beginning Farmer Tax Deduction Program

The Missouri Beginning Farmer Tax Deduction Program allows farm owners who sell farmland to beginning farmers on or after August 28, 2023, to subtract from their Missouri adjusted gross income an amount equal to the portion of capital gains received. It is administered by the Missouri Agricultural and Small Business Development Authority (MASBDA).

Farm owners must dispose of farmland through a sale to a beginning farmer, a lease/rental (10 years or less), or a crop-share arrangement (10 years or less). Beginning farmers qualify if they have filed 1–10 Schedule F forms since age 18, obtained USDA beginning farmer loans, operate new production agriculture, or are qualified family members (related within the fourth degree).

For sales, the capital-gains deduction steps down by bracket: first $2,000,000 100% deductible; $2,000,001–$3,000,000 80%; $3,000,001–$4,000,000 60%; $4,000,001–$5,000,000 40%; $5,000,001–$6,000,000 20%. For rental/lease/crop-share arrangements, the owner may reduce Missouri adjusted gross income up to $25,000 per tax year. Effective for transactions on or after August 28, 2023.

Apply through MASBDA at (573) 751-2129 or masbda@mda.mo.gov.