26 U.S.C. § 1257

(a) Gain treated as ordinary income Any gain on the disposition of converted wetland or highly erodible cropland shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle, except that this section shall not apply to the extent such gain is recognized as ordinary income under any other provision of this part. (b) Loss treated as long-term capital loss Any loss recognized on the disposition of converted wetland or highly erodible cropland shall be treated as a long-term capital loss. (c) Definitions For purposes of this section— (1) Converted wetland The term “converted wetland” means any converted wetland (as defined in section 1201(a)(7) of the Food Security Act of 1985 ( 16 U.S.C. 3801(7) )) held— (A) by the person whose activities resulted in such land being converted wetland, or (B) by any other person who at any time used such land for farming purposes. (2) Highly erodible cropland The term “highly erodible cropland” means any highly erodible cropland (as defined in section 1201(a)(10) of the Food Security Act of 1985 ( 16 U.S.C. 3801(10) )), if at any time the taxpayer used such land for farming purposes (other than the grazing of animals). (3) Treatment of successors If any land is converted wetland or highly erodible cropland in the hands of any person, such land shall be treated as converted wetland or highly erodible cropland in the hands of any other person whose adjusted basis in such land is determined (in whole or in part) by reference to the adjusted basis of such land in the hands of such person. (d) Special rules Under regulations prescribed by the Secretary, rules similar to the rules applicable under section 1245 shall apply for purposes of subsection (a). For purposes of sections 170(e) and 751(c), amounts treated as ordinary income under subsection (a) shall be treated in the same manner as amounts treated as ordinary income under section 1245.