Us Code § 1257 - Disposition of converted wetlands or highly erodible croplands
Full text of Us Code United States Code § 1257 — Disposition of converted wetlands or highly erodible croplands, with citation guidance and answers to common questions.
§ 1257. Disposition of converted wetlands or highly erodible croplands
(a) Gain treated as ordinary income
Any gain on the disposition of converted wetland or highly erodible cropland shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle, except that this section shall not apply to the extent such gain is recognized as ordinary income under any other provision of this part.
(b) Loss treated as long-term capital loss
Any loss recognized on the disposition of converted wetland or highly erodible cropland shall be treated as a long-term capital loss.
(c) Definitions
For purposes of this section—
(1) Converted wetland
The term "converted wetland" means any converted wetland (as defined in section 1201(a)(7) of the Food Security Act of 1985 (16 U.S.C. 3801(7))) held—
(A) by the person whose activities resulted in such land being converted wetland, or
(B) by any other person who at any time used such land for farming purposes.
(2) Highly erodible cropland
The term "highly erodible cropland" means any highly erodible cropland (as defined in section 1201(a)(10) of the Food Security Act of 1985 (16 U.S.C. 3801(10))), if at any time the taxpayer used such land for farming purposes (other than the grazing of animals).
(3) Treatment of successors
If any land is converted wetland or highly erodible cropland in the hands of any person, such land shall be treated as converted wetland or highly erodible cropland in the hands of any other person whose adjusted basis in such land is determined (in whole or in part) by reference to the adjusted basis of such land in the hands of such person.
(d) Special rules
Under regulations prescribed by the Secretary, rules similar to the rules applicable under section 1245 shall apply for purposes of subsection (a). For purposes of sections 170(e) and 751(c), amounts treated as ordinary income under subsection (a) shall be treated in the same manner as amounts treated as ordinary income under section 1245.
(Added Pub. L. 99–514, title IV, §403(a), Oct. 22, 1986, 100 Stat. 2222; amended Pub. L. 108–27, title III, §302(e)(4)(B)(ii), May 28, 2003, 117 Stat. 764; Pub. L. 115–141, div. U, title IV, §401(a)(177), (178), Mar. 23, 2018, 132 Stat. 1192.)
Editorial Notes
Amendments
2018—Subsec. (c)(1). Pub. L. 115–141, §401(a)(177), substituted "section 1201(a)(7)" for "section 1201(4)" and "16 U.S.C. 3801(7)" for "16 U.S.C. 3801(4)" in introductory provisions.
Subsec. (c)(2). Pub. L. 115–141, §401(a)(178), substituted "section 1201(a)(10)" for "section 1201(6)" and "16 U.S.C. 3801(10)" for "16 U.S.C. 3801(6)".
2003—Subsec. (d). Pub. L. 108–27 struck out ", 341(e)(12)," after "170(e)".
Statutory Notes and Related Subsidiaries
Effective Date of 2003 Amendment
Amendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after Dec. 31, 2002, see section 302(f) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.
Effective Date
Pub. L. 99–514, title IV, §403(c), Oct. 22, 1986, 100 Stat. 2222, provided that: "The amendments made by this section [enacting this section] shall apply to dispositions of converted wetland or highly erodible cropland (as defined in section 1257(c) of the Internal Revenue Code of 1986 as added by this section) first used for farming after March 1, 1986, in taxable years ending after that date."
About This Section
26 U.S.C. § 1257 is part of Title 26 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.
This section may be cited in legal writing as 26 U.S.C. § 1257. For the most current official text, including any recent amendments, use the official source links below. Do not rely on this page as the sole authority for legal citation or litigation.
How to Read This Statute
Statutes are organized by title, chapter, section, and subsection. Pay attention to words like "shall," "may," "and," and "or," because they determine whether a requirement is mandatory or permissive and whether multiple conditions must all be met. Historical notes and amendments often appear at the end of a section.
Using This Page
This page is intended for research and educational use. Lawyers, students, journalists, and compliance professionals can use it as a starting point, but should always verify the current text through an official government source before relying on it for legal advice, filings, or compliance decisions.