[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4643 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4643

  To amend the Internal Revenue Code of 1986 to treat lands which are 
 contiguous to a principal residence and which were farmed for 5 years 
 before the sale of the principal residence as part of such residence.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 1998

 Mr. Smith of Michigan (for himself and Mr. Bob Schaffer of Colorado) 
 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 treat lands which are 
 contiguous to a principal residence and which were farmed for 5 years 
 before the sale of the principal residence as part of such residence.

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

SECTION 1. INCLUSION OF FARMLAND AS PART OF PRINCIPAL RESIDENCE.

    (a) In General.--Subsection (d) of section 121 of the Internal 
Revenue Code of 1986 (relating to special rules concerning the 
exclusion of gain from sale of principal residence) is amended by 
adding at the end the following new paragraph:
            ``(9) Farmland.--If, for each of the 5 taxable years 
        preceding the taxable year in which the sale or exchange of a 
        principal residence occurs, amounts were includible in gross 
        income from a farming business conducted on real property 
        contiguous to the principal residence, then such real property 
        shall, at the election of the taxpayer, be treated as part of 
        the principal residence for purposes of this section. For 
        purposes of the preceding sentence, the term `contiguous' means 
        adjacent or adjoining (at 1 or more corners), not taking into 
        account any road right-of-way.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to sales and exchanges occurring after the date of the enactment 
of this Act.
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