There’s no question about the eligibility of income distributed from a farm partnership1 for income averaging.2 The question, however, is whether the sale of a partnership interest is also eligible for the statutory income averaging provision. The answer is not clear from the regulations nor is it completely clear whether a partner not engaged in farming could make use of the income averaging provision even if the proceeds from the sale of partnership interests would otherwise be eligible.
Harl, Neil E.
"Income Averaging for Sale of Farm Partnership Interest?,"
Agricultural Law Digest: Vol. 21
, Article 1.
Available at: http://lib.dr.iastate.edu/aglawdigest/vol21/iss10/1