What’s New

Gain from the sale or exchange of qualified farmland property to qualified farmers. P.L. 119-21, commonly known as the One Big Beautiful Bill Act, created new section 1062 regarding the gain from the sale or exchange of qualified farmland property to qualified farmers. Section 1062 allows taxpayers to elect to pay the net income tax attributable to the gain from the sale or exchange of qualified farmland property to qualified farmers in four equal annual installments. This election is available for sales and exchanges of qualified farmland property to a qualified farmer in tax years beginning after July 4, 2025. For more information, see section 1062 and new Form 1062, Deferral of Tax on Gain From the Sale or Exchange of Qualified Farmland Property to Qualified Farmers, when it is available.

To report the section 1062 applicable net tax liability and the installment due in the first tax year, two lines were added on Form 990-T. Report the full amount of section 1062 applicable net tax liability on Part III, line 6k. Report the first installment due in tax year 2025 on Form 990-T, Part III, line 5b. For more information, see the instructions for Line 5b and Line 6k , later.

Relief from additions to tax for underpayment of esti- mated income tax by taxpayers making an election under section 1062. The IRS will waive a portion of the penalty imposed under section 6655 for failure to make estimated tax payments attributable to a qualified sale or exchange of qualified farmland to qualified farmers for which an election under section 1062(a) is properly made. Taxpayers that elect under section 1062 to defer payment of tax may calculate required estimated tax payments using the guidance in Notice 2026-3. See Notice 2026-3, 2026-02 I.R.B. 307, available at IRS.gov/irb/ 2026-02_IRB#NOT-2026-3 .

In addition, section 70302(f) of P.L. 119-21 provides organizations with various transition options that may be applied to recover unamortized amounts paid or incurred in tax years beginning after December 31, 2021, and

Domestic research and experimental expenditures. P.L. 119-21 adds new section 174A to the Internal Revenue Code. Section 174A(a) allows organizations to deduct amounts paid or incurred for domestic research and experimental expenditures in tax years beginning after December 31, 2024.

Alternatively, under section 174A(c), an organization may elect to charge such expenditures to a capital account and amortize such expenditures ratably over a period of not less than 60 months, beginning with the month in which the organization first realizes benefits from such expenditures.

Instructions for Form 990-T (2025) Catalog Number 11292U Feb 3, 2026 Department of the Treasury Internal Revenue Service www.irs.gov

before January 1, 2025, that were capitalized and amortized for such tax years. See Rev. Proc. 2025-28, 2025-38 I.R.B. 393 available at IRS.gov/irb/ 2025-38_IRB#REV-PROC-2025-28 , for information regarding the transition options contained in section 70302(f) of P.L. 119-21, as well as the procedures to follow to begin applying either section 174A(a) or (c) for the organization’s first tax year beginning after December 31, 2024.

Direct deposit. If there is an overpayment on Part III, line 11, enter the organization’s direct deposit information on Form 8050, Direct Deposit of Tax Exempt or Government Entity Tax Refund. See the instructions for Line 11 , later, for more information.