What is the stepped-up basis on inherited farmland?

Under current federal tax law (Internal Revenue Code section 1014), most inherited property receives a new cost basis equal to its fair market value on the date of the decedent's death. That "stepped-up" basis usually erases the capital gain that had accumulated during the decedent's life, so a sale by the heir at or near date-of-death value typically triggers little or no federal capital gains tax. State treatment varies. This is a well-known and widely-cited feature of the current code, but the mechanics of any specific estate depend on ownership form, community-property rules, and elections available to the executor. Do not rely on a general write-up: work with a farm-savvy attorney or CPA on the specific facts.

What numbers should we bring to the family succession meeting?

Dollars-per-acre figures for the specific parcel, from federal data: what it earns as row-crop cash rent, what a solar or wind lease band looks like, and the closest sale or NASS-reported value for context, plus CRP's status. New CRP enrollment is paused, so there is no CRP figure to bring. Scout publishes the rent and lease figures as a free parcel read for any U.S. parcel today. On the example Story County, IA parcel used above, a rent band of $232 to $348/ac and a NASS Iowa cropland value near $10,700/ac are the honest starting anchors; the lease figures depend on soil and grid, which Scout reads per parcel.

How does succession planning affect a running lease or CRP contract?

Both continue past the ownership change; neither automatically terminates on the death of the owner. A cash-rent lease normally binds the estate through its term and often through automatic renewal. A CRP contract can be assumed, revised, or terminated on transfer, but FSA has to review it before closing on a sale; ending a contract early can trigger repayment of past payments plus interest. Bring both to the family meeting alongside the four earning numbers.

Guides

Numbers to put on the table before the family meeting

Succession is a conversation with a lawyer and, often, a CPA. This page is not that. This page is what to put on the table with the family, in dollars per acre, before the conversation with the professionals so the conversation can be a good one. Four uses for the ground, one tax-code fact worth knowing, and the two calendar dates that end up mattering. General information for landowners, not legal or tax advice.

Reviewed September 2026. Federal data below refreshes on the source-agency cycles.

Not legal or tax advice

Nothing on this page is legal or tax advice. Federal and state tax law changes; ownership form, life estates, LLCs, and trusts all change the answer for a specific family. Bring the parcel numbers here to a farm-savvy attorney and CPA to plan the actual transfer.

Example parcel

Four dollars-per-acre figures, Story County, IA

For an example parcel in Story County, IA, USDA NASS reported the 2026 county cash-rent average at $290 per acre. On a specific parcel, a Scout free read publishes a modeled soil-adjusted rent band that runs roughly $232 to $348 per acre. NASS reported Iowa cropland value in 2026 at $10,700 per acre. Neither figure is a specific owner's lease or sale; both are the honest starting anchors. Scout also reports a solar or wind lease band per parcel and shows CRP's status (new CRP enrollment is paused, so there is no CRP band), which round out the four uses on the same map view.

Example parcel is illustrative. Verify the current-year figures and get the parcel-adjusted bands for your specific ground. Every Scout number carries its source and vintage.

Four uses per acre: bring all four to the meeting

Use	Anchor number	Parcel-scale number (from a Scout free read)	Source
Farm it (cash rent to a tenant)	$290/ac county NASS 2026	Example parcel band $232 to $348/ac, keyed to SSURGO productivity	USDA NASS county cash rent + SSURGO
Enroll in conservation (CRP)	Enrollment paused (USDA FSA, Notice CRP-1101)	No CRP figure while new enrollment is paused; Scout still flags the acres the soil data marks as likely eligible	USDA FSA Notice CRP-1101, "CRP Authority After September 30, 2026"
Lease for solar or wind	Modeled lease band per parcel from NREL output and transmission proximity	Scout publishes a landowner-facing solar or wind lease band on the free read; developer offers move with local grid capacity	NREL PVWatts, WINDExchange, LBNL Queued Up interconnection queue
Sell (transferred at stepped-up basis, in most cases)	$10,700/ac Iowa cropland USDA NASS 2026	Neither Scout nor this page reports a per-parcel market value; NASS state and county sales are the honest anchor	USDA NASS cropland values, state series

Every anchor comes from a named federal series; every parcel-scale number is what a Scout free read publishes today for any U.S. parcel. See how we get our numbers for the sources and vintages.

The stepped-up basis, in plain English

Under current federal tax law, most inherited farmland gets a new cost basis equal to its fair market value on the date the previous owner died. That is the "step-up" people talk about. In practice, an heir who sells the ground at or near that date-of-death value usually owes little or no federal capital gains tax on the sale, even if the parents bought the ground for a fraction of its current worth. State tax treatment varies and community-property rules matter; this is not the whole story.

What it means for a family meeting: an heir considering a sale is often deciding at a different tax price than the parent would have been. That does not decide whether to sell, and it does not decide whether to keep the ground with a lease or a CRP enrollment. It just means the numbers for those four uses should be laid down honestly, at their real per-acre figures, and the conversation should be about the ground, not about a tax shortcut.

Two calendar dates to know

A CRP contract's expiration date matters: the year the contract ends is the year you can re-offer the acres or return them to production without a repayment consequence (while new CRP enrollment is paused, a re-offer waits until Congress extends CRP authority). If the transfer is mid-contract, FSA needs to review it before closing on a sale; ask about the assumption, revision, or termination path at the county FSA office in advance.

A cash-rent lease's renewal-notice date matters: most Midwest states require notice to end an oral or written cash lease well before the end of the lease year (often September 1). Missing that date usually auto-renews the lease for another year on the same terms. Put both dates on the family calendar as part of the succession plan.

Farm succession: common questions

What is the stepped-up basis on inherited farmland?: Under current federal tax law (Internal Revenue Code section 1014), most inherited property receives a new cost basis equal to its fair market value on the date of the decedent's death. That "stepped-up" basis usually erases the capital gain that had accumulated during the decedent's life, so a sale by the heir at or near date-of-death value typically triggers little or no federal capital gains tax. State treatment varies. This is a well-known and widely-cited feature of the current code, but the mechanics of any specific estate depend on ownership form, community-property rules, and elections available to the executor. Do not rely on a general write-up: work with a farm-savvy attorney or CPA on the specific facts.
What numbers should we bring to the family succession meeting?: Dollars-per-acre figures for the specific parcel, from federal data: what it earns as row-crop cash rent, what a solar or wind lease band looks like, and the closest sale or NASS-reported value for context, plus CRP's status. New CRP enrollment is paused, so there is no CRP figure to bring. Scout publishes the rent and lease figures as a free parcel read for any U.S. parcel today. On the example Story County, IA parcel used above, a rent band of $232 to $348/ac and a NASS Iowa cropland value near $10,700/ac are the honest starting anchors; the lease figures depend on soil and grid, which Scout reads per parcel.
How does succession planning affect a running lease or CRP contract?: Both continue past the ownership change; neither automatically terminates on the death of the owner. A cash-rent lease normally binds the estate through its term and often through automatic renewal. A CRP contract can be assumed, revised, or terminated on transfer, but FSA has to review it before closing on a sale; ending a contract early can trigger repayment of past payments plus interest. Bring both to the family meeting alongside the four earning numbers.

Four numbers, one parcel, one page.

Type an address. Scout reads the four uses per acre for the specific ground: farm, cash rent, conservation, and lease. Bring them to the meeting.

Free to start on any parcel.