Farmland Capital Gains Equity Act of 2005 - Amends the Internal Revenue Code to provide an exclusion from gross income of gain from the sale of qualified farm property. Defines "qualified farm property" as U.S. property used by a taxpayer or a member of his family as a farm for farming purposes for at least three years. Requires such taxpayer or family member to materially participate in the operation of the farm.
Limits the amount of such exclusion to $500,000 ($250,000 in the case of a married individual filing a separate return), reduced by the aggregate amount of gain excluded for all preceding taxable years.