Picture a farm banker and a corn farmer sitting at the kitchen table, staring at a refinance term sheet like it is a mystery novel. The One Big Beautiful Bill Act just added a fresh plot twist: Section 139L. 25% of interest on qualifying rural a...
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IRS Signals Big Changes Ahead for Farm Loan Refinancing
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Subscribe24 NOV 2025 / IRS UPDATES
The One Big Beautiful Bill Act has changed the taxation rules, allowing the exclusions of 25% of the interest on rural and agricultural real estate loans from the lender’s taxable income. However, when an old farm loan is refinanced, only the incremental increase in the loan amount will qualify for the 25% interest exclusion, and the original loan amount will remain fully taxable. This affects the structuring of refinances, the valuation requirements, and the detail of collateral discussions. The tax benefit could indirectly impact borrowers by potentially influencing loan rates and terms.
Picture a farm banker and a corn farmer sitting at the kitchen table, staring at a refinance term sheet like it is a mystery novel. The One Big Beautiful Bill Act just added a fresh plot twist: Section 139L. 25% of interest on qualifying rural a...
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