[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 251 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 251

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 30, 1997

 Mr. Shelby (for himself, Mr. Grassley, Mr. Cochran, Mr. Roberts, Mr. 
 Abraham, and Mr. Hutchinson) introduced the following bill; which was 
          read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 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>