Excludes from gross income any gain from the sale of real property interests to qualified organizations for military readiness and environmental protection purposes, promoting conservation and military readiness.
Ted Budd
Senator
NC
The "Incentivizing Readiness and Environmental Protection Integration Sales Act of 2025" incentivizes land conservation by excluding from gross income the gains from sales of real property to qualified organizations for the purposes of the Readiness and Environmental Protection Integration (REPI) program. This exclusion applies to various real property interests, including remainder interests and restrictions on property use, as long as the sale aligns with Department of Defense REPI program goals. There are limitations to prevent short-term property speculation by pass-through entities, with exceptions for family-owned entities. This act aims to promote both military readiness and environmental protection through strategic land conservation.
Tax Break for Land Sales Supporting Military and Environment Kicks Off in 2025
The "Incentivizing Readiness and Environmental Protection Integration Sales Act of 2025" is a new tax break for landowners who sell property for military readiness and environmental protection. Starting after the enactment date, profits from these sales won't be included in your gross income, meaning they're tax-free.
Making Green by Going Green (and Helping the Military)
This bill aims to make it financially attractive for landowners to sell their land for use in the Department of Defense's Readiness and Environmental Protection Integration (REPI) program. This program helps preserve land around military installations, which is good for both training exercises and the environment. The law defines "qualified real property interest" broadly, covering everything from selling the entire property to granting a conservation easement (a restriction on the property's use). They even cover retained mineral rights, as long as you aren't planning on surface mining.
The bill excludes from gross income any gains from the sale of such property to a "qualified organization," which is defined under section 170(h)(3) of the Internal Revenue Code. Basically, these are organizations already recognized for their work in conservation and land preservation.
No Quick Flips for Tax Breaks
There's a catch, though. To prevent people from gaming the system, the bill includes a limitation for pass-through entities (think partnerships or S-corps). If the entity bought the land within three years of selling it, they don't get the tax break. This stops companies from quickly buying and selling land just to avoid taxes. There's an exception for family-owned businesses, recognizing that family farms and ranches often operate as pass-through entities and might have legitimate reasons for selling within three years.
For example, imagine a family-owned farm bordering a military base. If they decide to sell their land to the REPI program, any profit they make is tax-free. But if a real estate investment company buys land near a base and then quickly sells it to the REPI program, they will pay taxes on the profit.
The Big Picture
This law essentially provides a financial incentive for landowners to support both national security and environmental conservation. By making these land sales tax-free, the government is hoping to encourage more participation in the REPI program. It's a win-win on paper: landowners get a tax break, the military gets land for training and buffer zones, and the environment benefits from land conservation. However, it is important to note the potential for abuse. Businesses may try to use quick sales to avoid tax payments. Also, some sales may meet the bare minimum for environmental protection while still allowing the seller to claim the tax benefit.