[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3036 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 3036

      To amend the Internal Revenue Code of 1986 to exempt small 
    unincorporated farm businesses from the alternative minimum tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 12, 1997

    Mr. Smith of Michigan (for himself, Mr. Barcia, Mr. Latham, Mr. 
  Jenkins, Mr. Pombo, and Mr. Calvert) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
      To amend the Internal Revenue Code of 1986 to exempt small 
    unincorporated farm businesses from the alternative minimum tax.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXEMPTION FOR FARM INCOME FROM UNINCORPORATED FARM 
              BUSINESSES FROM ALTERNATIVE MINIMUM TAX.

    (a) In General.--Section 55 of the Internal Revenue Code of 1986 
(relating to alternative minimum tax imposed) is amended by adding at 
the end the following new subsection:
    ``(f) Exemption for Unincorporated Farming Business Income.--
            ``(1) In general.--In the case of a taxpayer (other than a 
        corporation) described in paragraph (2), income from a farming 
        business engaged in by the taxpayer, and deductions relating to 
        the production of such income, shall not be taken into account 
        in determining alternative minimum taxable income for the 
        taxable year.
            ``(2) Gross receipts test.--A taxpayer is described in this 
        paragraph if the gross receipts of the taxpayer attributable to 
        such farming business--
                    ``(A) meet the $5,000,000 gross receipts test of 
                section 448(c) for the first taxable year of the 
                taxpayer beginning after December 31, 1996, and
                    ``(B) would meet such test for the taxable year and 
                all prior taxable years beginning after such first 
                taxable year if such test were applied by substituting 
                `$7,500,000' for `$5,000,000'.
            ``(3) Prospective application of minimum tax if income from 
        a farming business ceases to be small.--In the case of a 
        taxpayer whose income from a farming business is not taken into 
        account for any prior taxable year by reason of paragraph (1), 
        the application of this part for taxable years beginning with 
        the first taxable year for which farming income of the taxpayer 
        is so taken into account shall be determined in accordance with 
        rules similar to the rules of subparagraphs (A) through (G) of 
        subsection (e)(2).
            ``(4) Farming business.--For purposes of this subsection, 
        the term `farming business' has the meaning given such term by 
        section 263A(e)(4).
            ``(5) Aggregation rules.--For purposes of determining gross 
        receipts under paragraph (2)--
                    ``(A) all related persons engaged in a farming 
                business shall be treated as 1 person, and
                    ``(B) a person is related to another person if the 
                related person bears a relationship to such person 
                specified in section 147(a)(2) or the related person 
                and such person are engaged in trades or businesses 
                under common control (within the meaning of subsections 
                (a) and (b) of section 52).
        For purposes of the preceding sentence, in applying section 
        267(b) or 707(b)(1) by reason of section 147(a)(2)(A), `10 
        percent' shall be substituted for `50 percent'.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1997.
                                 <all>