To amend the Internal Revenue Code of 1986 to allow farmland sold during the same taxable year as the farmer's principal residence to be eligible for the $125,000 exclusion of gain on sale of a principal residence.

Amends the Internal Revenue Code to allow a taxpayer to include farm property sold during the same taxable year as a principal residence in the one-time exclusion of gain from sale of a principal residence by an individual who has attained age 55. Sets forth a formula limiting the extent of such exclusion.