IRS Notice: Interim Guidance for Interest Exclusion on Rural, Agricultural Real Estate Loans (IRC §139L)

The IRS has published interim guidance regarding the exclusion from gross income of 25 percent of interest received by qualified lenders on eligible real estate loans secured by rural or agricultural real property under I.R.C. §139L. Qualified lenders include insured banks, regulated insurance companies, certain subsidiaries of banks and insurance holding companies, and federally chartered farm credit instrumentalities. Qualified real estate loans must be secured by property used for agricultural production, fishing, seafood processing, or aquaculture facilities, and these loans must be made after July 4, 2025. The notice establishes a safe harbor, allowing loans to qualify when the property ...