Top 50 Questions about Farmland
The short answer is yes, you absolutely can.
But there are a few important things to understand about how leases work in Iowa.
How Lease Termination Works in Iowa
In Iowa, lease termination must occur by September 1st.
If you did not serve lease termination, we can still sell your farm. The buyer will simply purchase it subject to the existing lease.
If you did serve lease termination, then the farm becomes an open lease for the next crop year. That often makes the land more appealing and can bring in a stronger sale price, since buyers can choose their own tenant.
Selling a Farm With a Lease in Place
When a property has a current lease, it works like selling a hotel or a shopping mall—you don’t kick everyone out before the sale. The new buyer steps into the lease terms already in place.
You can sell your farm subject to the lease, and the buyer takes over from there.
Who Gets the Cash Rent?
This is where timing and motivation matter.
We help every seller decide:
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Should the seller keep the cash rent?
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Should the buyer receive the rent as part of the deal?
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Should the cash rent adjust the purchase price?
The right answer depends on the season, the seller’s goals, and the buyer’s expectations.
Tax Implications to Consider
Cash rent affects taxes differently depending on how you structure the sale:
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If you collect the rent, it may count as ordinary income.
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If it reduces the purchase price, you may lower your future capital gains tax.
We walk every seller through these details so they understand the financial impact.
Bottom Line
Yes—you can sell your farm even if it’s currently leased.
The key is understanding how lease terms, cash rent, and taxes fit into the sale.
David Whitaker | Iowa Land Guy
