[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 905 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 905

To amend the Internal Revenue Code of 1986 to simplify the application 
    of self-employment tax in the case of family farming businesses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 2003

  Mr. Pomeroy (for himself and Mr. Houghton) 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 simplify the application 
    of self-employment tax in the case of family farming businesses.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Farm Tax Simplification Act 
of 2003''.

SEC. 2. TREATMENT OF FARMING JOINT VENTURES BY HUSBAND AND WIFE.

    (a) In General.--Section 761 of the Internal Revenue Code of 1986 
(defining terms for purposes of partnerships) is amended by 
redesignating subsection (f) as subsection (g) and by inserting after 
subsection (e) the following new subsection:
    ``(f) Qualified Farming Joint Venture.--
            ``(1) In general.--In the case of a qualified farming joint 
        venture conducted by a husband and wife who file a joint return 
        for the taxable year, for purposes of this title--
                    ``(A) such joint venture shall not be treated as a 
                partnership,
                    ``(B) all items of income, gain, loss, deduction, 
                and credit shall be divided equally between the 
                spouses, and
                    ``(C) each spouse shall take into account such 
                spouse's respective share of such items as if they were 
                attributable to a trade or business conducted by such 
                spouse as a sole proprietor.
            ``(2) Qualified farming joint venture.--For purposes of 
        this paragraph (1), the term `qualified farming joint venture' 
        means any joint venture involving the conduct of a farming 
        business if--
                    ``(A) the only members of such joint venture are a 
                husband and wife,
                    ``(B) both spouses materially participate in such 
                business (within the meaning of section 1402(a)(1)(B)), 
                and
                    ``(C) both spouses elect the application of this 
                subsection.''.
    (b) Net Earnings From Self-Employment.--
            (1) Subsection (a) of section 1402 of such Code (defining 
        net earnings from self-employment) is amended by striking 
        ``and'' at the end of paragraph (14), by striking the period at 
        the end of paragraph (15) and inserting ``; and'', and by 
        inserting after paragraph (15) the following new paragraph:
            ``(16) notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified farming joint venture shall be taken into account as 
        provided in section 761(f) in determining net earnings from 
        self-employment of such spouse.''.
            (2) Subsection (a) of section 211 of the Social Security 
        Act (defining net earnings from self-employment) is amended by 
        striking ``and'' at the end of paragraph (14), by striking the 
        period at the end of paragraph (15) and inserting ``; and'', 
        and by inserting after paragraph (15) the following new 
        paragraph:
            ``(16) Notwithstanding the preceding provisions of this 
        subsection, each spouse's share of income or loss from a 
        qualified farming joint venture shall be taken into account as 
        provided in section 761(f) of the Internal Revenue Code of 1986 
        in determining net earnings from self-employment of such 
        spouse.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.
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