[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 86 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                 H. R. 86

 To amend the Internal Revenue Code of 1986 to allow farmers to income 
                         average over 2 years.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

Mr. Smith of Michigan (for himself, Mr. Smith of Oregon, Mr. Stenholm, 
   Mr. Skeen, Mr. Barcia, Mr. Barrett of Wisconsin, Mr. Boehner, Mr. 
  Evans, Mr. Hostettler, Mr. Norwood, Mr. Pomeroy, Ms. Stabenow, Mr. 
 Combest, Mr. McHugh, Mr. Weller, Mr. Solomon, Mr. Pombo, Mr. Boswell, 
 Mr. Chambliss, Mr. Latham, Mr. Blunt, Mr. Peterson of Minnesota, Mr. 
Hill, Mr. Ewing, Mr. Hastert, Mr. Kingston, Mr. Herger, Mr. Thune, Mr. 
Frost, Mr. McInnis, Mr. Parker, Mr. Nethercutt, Mr. Sensenbrenner, and 
  Mr. Crapo) 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 allow farmers to income 
                         average over 2 years.

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

SECTION 1. AVERAGING OF FARM INCOME OVER 2 YEARS.

    (a) In General.--Subpart B of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 (relating to taxable year for 
which items of gross income included) is amended by adding at the end 
the following new section:

``SEC. 460A. AVERAGING OF FARM INCOME.

    ``(a) In General.--At the election of a taxpayer engaged in a 
farming business, the tax imposed by section 1 for such taxable year 
shall be equal to the sum of--
            ``(1) a tax computed under such section on taxable income 
        reduced by elected farm income, plus
            ``(2) the increase in tax which would result if taxable 
        income for the prior taxable year were increased by the elected 
        farm income.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Elected farm income.--
                    ``(A) In general.--The term `elected farm income' 
                means so much of the taxable income for the taxable 
                year--
                            ``(i) which is attributable to any farming 
                        business, and
                            ``(ii) which is specified in the election 
                        under subsection (a).
                    ``(B) Treatment of gains.--For purposes of 
                subparagraph (A), gain from the sale or other 
                disposition of property (other than land) regularly 
                used by the taxpayer in a farming business for a 
                substantial period before such sale or disposition 
                shall be treated as attributable to a faming business.
            ``(2) Farming business.--The term `farming business' has 
        the meaning given such term by section 263A(e)(4).
    ``(c) Termination.--This section shall not apply to the 
determination of tax for any taxable year beginning after December 31, 
2002.''
    (b) Clerical Amendment.--The table of sections for such subpart B 
is amended by adding at the end the following new item:

                              ``Sec. 460A. Averaging of farm income.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>